Flag with the Stellantis logo on the front entrance of the FCA factory in Mirafiori on January 18, 2021 in Turin, Italy.
Stefano Guidi | Getty Images
LONDON – Stellantis, the product of the $ 52 billion merger between Fiat Chrysler Automobiles and Peugeot, was well received by European investors on Monday’s first trading day.
Shares of the world’s fourth largest carmaker by volume, created after the merger closed on Saturday, rose 7.5% in afternoon trading after launching on the Milan and Paris stock exchanges.
Stocks listed in Milan started trading at Euro 12,758 per share with a market capitalization of Euro 39.2 billion ($ 47.3 billion), and by afternoon deals in Europe they were up at Euro 13.55 per share.
In a virtual launch on Borsa Italiana’s website, Carlos Tavares, CEO of Stellantis, former CEO of PSA Group, said the merger would add 25 billion euros in shareholder value in the coming years as a result of expected cost savings.
“All of our employees and our management teams are fully focused on the value creation embedded in the FCA-PSA merger and the creation of Stellantis,” he added.
Chairman John Elkann said the next decade is likely to “redefine mobility as we know it”.
“We have the scale, resources, diversity and knowledge to successfully exploit the opportunities of this new transportation era,” he said.
“Our ambition is to build something unique, something great, by providing our customers with distinctive, safe, convenient, innovative and sustainable vehicles and mobility services.”
The stock will launch in New York when Wall Street opens Tuesday, with US markets closed for a bank holiday Monday, after which Tavares will hold his first press conference as CEO of Stellantis.
The launch marked the culmination of the concatenation talks that began in late 2018, and comes as the auto industry tries to weather a seismic shift in consumer demand for electric vehicles.
Ahead of the deal, S&P Global Ratings improved FCA’s creditworthiness, predicting that Stellantis would benefit from greater scale and geographic diversity and a strong capital structure.
“The combined entity will have a solid balance sheet, good outlook for free cash flow and a large liquidity buffer,” S&P analysts Vittoria Ferraris and Margaux Pery said in a note.
“In our baseline scenario, Stellantis’ net cash position will fluctuate at approximately € 14 billion on an unadjusted basis. This will provide the group with a significant buffer against market conditions, which remain exposed to COVID-19 linked mobility limitation risks during the first half of 2021, and could suffer from the gradual reduction in government aid. “