Stellantis Stock Soars Over 6% on Debut as Fiat and Peugeot Complete Merger

By Mariliana Fotopoulou Monday, January 18, 2021

Shares of Stellantis soared over 6% in Milan today on their first trading day. Two days ago, Fiat Chrysler Automobiles (FCA) and the maker of Peugeot, PSA Group, announced that their $48 billion merger is completed.

Fourth-Largest Carmaker Globally

On Saturday, two car-making giants said their $48 billion merger is completed. Therefore, Stellantis — a new company created by the merger — made its debut on the Italian Stock Exchange in Milano and Euronext in Paris.

Shares will start trading on the New York Stock Exchange (NYSE) on Tuesday, January 19, 2021, under the ticker “STLA,” according to an official statement. Prior to today’s market debut, PSA shares were exchanged into new FCA shares. Today, all FCA shares were then renamed as “Stellantis.”

Stellantis is now officially the fourth largest company in the auto world as it has combined annual sales of more than 8 million vehicles. Leaders of PSA and FCA hope to challenge the world’s largest automakers — Japanese Toyota and German Volkswagen.

“We have the scale, the resources, the diversity and the knowhow to successfully capture the opportunities of this new era in transportation,” Chairman John Elkann said in a video posted on the Borsa Italiana website.

CEO Carlos Tavares projects that the new business can save over 5 billion euros ($6.03 billion) per year without plant closures. Therefore, the management is planning to unlock 25 billion euros ($30.15 billion) in value for shareholders over the next several years.

“I can tell you that the focus from day one will be on the value creation that is the result of the implementation of those synergies,” Tavares said.

Analysts and investors are now eagerly waiting to hear more from Tavares on the company’s next steps. Given the scale of a merger, the management is likely to focus on the rationalization of the new car business. Tackling massive overcapacity is one of the first tasks on Taveres’ agenda.

"He has proven to be the kind of person who prefers action to words, so I don't think he will make loud statements or try to over-sell targets," Marco Santino, a partner at consulting firm Oliver Wyman, said.

"It will be a step by step process, also to allow the market better appreciate every single move. I don't think we will have all the details before one year.”

STLA currently trades around 6.5% higher in Milano, according to TradingView data.

Summary

Stellantis stock price has achieved success on its first trading day as it trades about 6.5% higher. The new company was created after Fiat Chrysler Automobiles (FCA) and French PSA Group decided to merge.

About the Author


Headshot for author Mariliana Fotopoulou

Mariliana has an MSC in consumer analytics and business strategy. She has a special interest in fast-moving industries and big data.

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