Fiat Chrysler Automobiles and PSA Group completed their $52 billion tie-up and formally merged into Stellantis on Saturday.
The merger will create the fourth largerest fourth-largest automaker with combined annual sales of around 8.1 million vehicles and deep enough pockets to fund the shift to electric driving and take on bigger rivals Toyota and Volkswagen Group.
“The merger between Peugeot S.A. and Fiat Chrysler Automobiles N.V. that will lead the path to the creation of Stellantis N.V. became effective today,” the two automakers said in a statement.
It took over a year for the Italian-American and French automakers to finalize the deal, during which the global economy was upended by the COVID-19 pandemic. They first announced plans to merge in October 2019.
Shares in Stellantis will start trading in Milan and Paris on Monday, and in New York on Tuesday. PSA CEO Carlos Tavares will hold his first press conference as Stellantis CEO on Tuesday, after ringing NYSE’s bell with Stellantis Chairman John Elkann, who is FCA chairman.
Analysts and investors are turning their focus to how Tavares plans to address the huge challenges facing the group – from excess production capacity to a woeful performance in China.
FCA and PSA have said Stellantis can cut annual costs by over 5 billion euros ($6.1 billion) without plant closures, and investors will be keen for more details on how it will do this.
Marco Santino, a partner at consultants Oliver Wyman, said he expected Tavares to disclose the outlines of his action plan soon, but without divulging too many details at first.
“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,” Santino said.
Like all global automakers, Stellantis needs to invest billions in the years ahead to transform its vehicle range for the electric era.
But other pressing tasks loom, including reviving the group’s lagging fortunes in China, rationalizing its huge global empire and addressing massive overcapacity.
“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,” Santino said.
FCA CEO Mike Manley, who will head Stellantis’ key North American operations, has said 40 percent of the carmaker’s expected synergies would come from convergence of platforms and powertrains and from optimizing R&D investments, 35 percent from savings on purchases, and another 7 percent from savings on sales operations and general expenses.