Fiat and Peugeot-Citroën merger creates giant ‘Stellantis’

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The year 2021 started in a busy world car market, with the announcement of the merger between Fiat Chrysler (FCA) and Peugeot-Citroën (PSA), on Monday (4), after the approval of shareholders. The deal, which started in 2019, will lead to the creation of a new sector giant, led by Portuguese businessman Carlos Tavares, current CEO of the French group.

The merger of the Italian-American and French companies will result in the creation of Stellantis, whose name means something like “shine with the stars”. It will have its headquarters in Amsterdam (Netherlands) and shares traded on the New York, Paris and Milan stock exchanges as of the 18th. The market value of the new automaker is US $ 62.7 billion.

The alliance’s main proposal is to strengthen the presence of brands in markets in which they have little participation, focusing on electrification, connectivity and autonomous driving, investing in all segments (from light commercials to SUVs, luxury models and pickups).

Together, the 14 brands belonging to the two groups place Stellantis as the fourth largest automaker in the world, with more than 400 thousand employees. Among the brands are big names in the market, such as Alfa Romeo, Jeep, Dodge, RAM, Maserati, Lancia, Opel, DS and Vauxhall, in addition to those already mentioned Fiat, Chrysler, Peugeot and Citroën.

It is possible that the merger will lead to the closure of some of these brands, even though the two companies have announced their intention to not close any factory initially. Some of the most highly rated to stay on the road are Lancia and Chrysler, due to the low supply of cars, as reported by ArsTechnica.

Cost reduction and greater global presence

One of the proposals for the merger between Fiat and PSA is to generate an annual savings of € 5 billion through cooperation, a cost reduction that will be achieved within four years after the deal is concluded. The agreement also foresees a greater technological gain and great advances in the car production platforms.

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