Green light for mega-merger

Shareholders at Fiat Chrysler (FCA) and PSA have voted for a US$52 billion (NZ$72b) merger to create the world’s fourth largest automaker, which will be called Stellantis.

The new company is due to start trading from January 18 and produce about eight million vehicles a year.

With revenues of nearly NZ$300b, the venture is tipped to play a major role as the automotive industry turns increasingly towards the electrification of vehicles.

Stellantis will boast 14 marques, including FCA’s Fiat, Maserati, Jeep, Dodge and Ram, and PSA’s Peugeot, Citroen, Opel and DS.

At two separate extraordinary shareholder meetings, held virtually on January 4 because of the coronavirus pandemic, investors in each group backed the merger.

The move comes after FCA and PSA first announced their intentions to join forces in December 2019.

Carlos Tavares, PSA’s chief executive and future Stellantis CEO, says: “We are ready for this merger.” 

The executive team faces trying to revive the carmaker’s fortunes in China, rationalise a sprawling empire and address overcapacity, all while joining their rivals in the race to develop cleaner cars.

John Elkann, the future chairman of Stellantis, says the new company will “play a leading role as the next decade redefines mobility”.

PSA and FCA have pledged not to close any factories.

However, the companies have already spoken about consolidating vehicle platforms – the underpinnings and powertrains – to save billions of dollars in engineering and manufacturing costs.