Stellantis is born today, the fourth largest automotive group in the world behind Volkswagen, Toyota and the Renault-Nissan-Mitsubishi alliance. The shareholders of the two automotive giants, FCA and PSA, met and gave the green light to the merger from which a 44 billion euro capitalization group with 8.1 million cars sold, over 180 billion euro of turnover will be born. , 400 thousand employees and synergies for 5 billion euros. The first meeting to approve the merger was that of Peugeot with a very large majority. The green light came with 99.85% of the yes. At 2.30 pm the FCA was held, which also gave an almost unanimous ok with 99.15% of the votes.
“Our priority will be to reach the 5 billion euros of synergies indicated per year”, underlined Carlo Tavares, CEO of Psa, during the shareholders’ meeting, noting that, despite Covid-19, Psa continued to be profitable and believe even more in the project started with FCA. “With FCA we will have an extraordinary creation of value, also thanks to the synergies indicated. We will have significant resources and skills, a solid financial position and we will create safe mobility. Together we will be stronger than alone. Both companies are strong and in health and have good technological equipment, “Tavares predicted. The financial terms of the merger, in addition to the industrial assets, reflect a merger between equals. “Stellantis, for our part,
With the creation of the Stellantis group “we want to have a leading role in the next decade, which will redefine mobility, just as our founding fathers did with great energy in the pioneering years,” said FCA president John Elkann. The next decade, underlined the future president of Stellantis, “will redefine mobility. We intend to play a decisive role in building this new future, and it was this ambition that united us”.
According to Elkann, we are experiencing “an era of profound changes in our sector, characterized by a speed and intensity comparable only to what happened at its origins, at the end of the nineteenth century. It is an extremely complex era. , but at the same time exciting “. Our founding fathers, he recalled, have given birth to companies capable of withstanding the test of time and capable of meeting the challenges posed by the market. Companies that have been able to innovate, adapt to the times and needs of their customers. “This,” added Elkann – and what prompted us to create Stellantis and which will continue to inspire us as we continue to build on the foundations laid by this merger. ”
Thanks to the rich range of established and complementary brands, Stellantis will be competitive in all key segments, from luxury cars to premium models, from traditional passenger cars to SUVs from trucks to light commercial vehicles, with full market coverage, he noted. FCA CEO Mike Manley said that all this offers ample opportunities for platform convergence, spare parts standardization and other investment efficiencies that the merger is capable of generating. FCA has long had “clear ideas about these opportunities, including how these efficiencies can increase shareholder returns through a more effective investment approach in the new fields of technology that will define the industry over the next decade”,
redesign the group’s combined strategy in other geographic regions, including China.
After two years of negotiations, on 21 December the European Commission approved the joint aggregation, at the end of which, reasonably by the end of this month (the merger will be effective from the following day after the notarial deed is executed) if everything goes as planned, therefore in advance of the expected calendar (end of the first quarter 2021), Exor, the holding company of the Agnelli-Elkann family, will have approximately 14.4% of Stellantis, thus becoming the first shareholder of the new group. The other large shareholders will be the largest shareholders of PSA: the Peugeot family will have 7.2% with an option to rise up to 8.5%, the French state 6.2% through the subsidiary BPI and the Chinese of Dongfeng 5.6%.
According to Bloomberg indiscretions, the request to FCA to consider an alternative purchase proposal, in opposition to the merger with PSA to form Stellantis, from Frank B. Rhodes Jr., great-grandson of founder Walter P. Chrysler, did not take hold. and a client of Titan Global Advisers. The proposal suggested that, in addition to the cash price to be negotiated and the repayment of all existing debt, existing shareholders would receive the right to buy shares in the acquiring entity if it went public in the future. Rhodes had also proposed changing the company’s name to Chrysler-Dodge-Jeep-Ram Corp and moving its headquarters to the United States, while retaining the European headquarters in London.
Analysts weren’t expecting any last-minute surprises and expected FCA and PSA shareholders’ ok to the transaction based on the benefits offered by the combination of the two groups. So much so that both FCA and PSA rise to their respective markets, the first scored a + 1.92% to € 14.942 and the second a + 2.19% to € 22.86, also strengthened by the fact that with the approval of the merger and closing of the agreement, FCA shareholders will collect € 2.9 billion of extraordinary dividends, while the distribution of Faurecia shares to FCA and PSA shareholders should take place at a later date.
“Rhodes’s proposal appears to be a publicity stunt rather than a serious industrial project, so we expect it to be rejected and the shareholders’ meetings of FCA and PSA approve the merger today. Also, Rhodes’s objections to the FCA-PSA merger: it would remove future profits and technologies from the country would seem completely unfounded “, underlined Fidentiis, reiterating the buy rating on the FCA share with a target price between 14 and 15 euros after dividends and spin-offs, while for Intesa Sanpaolo FC it is worth 16 euros (rating buy ) and for Banca Akros even more: € 19.25 (rating buy). The latter believes that Rhodes’s proposal came too late. In addition, it lacks a strong industrial partner and would leave the question of FCA’s European activities unresolved. “We believe that Stellantis is already a reality”
Not to mention, continued Fidentiis, that the FCA stock is only partially discounting the potential synergies deriving from the merger: at least 5 billion euros when fully operational and the positive impact of the operation in terms of geographical distribution of sales, which will be well balanced between the EMEA area, 49%, and North America, 42%, with a good presence in Latin America, 4%, but still weak in the Apac area, 5%. Fidentiis also noted that FCA is currently traded at a 0.2% discount to PSA based on the merger exchange ratio (1.742 times after the distribution of the € 2.9 billion extraordinary dividend to FCA shareholders, corresponding to € 1.84 per share).
Furthermore, the broker recalled, a potential distribution of € 0.5 billion could be paid by each party before the closing of the merger, or, alternatively, a potential cash distribution of € 1 billion could be paid by Stellantis after the closing. , representing an additional remuneration of € 0.32 per share. Immediately following the merger, Stellantis will distribute the remaining Faurecia ordinary shares, representing 39.3% of the share capital, in addition to 308 million euros, the proceeds deriving from 9,663 million Faurecia shares sold on 29 October 2020 by Psa. This will be an additional distribution of € 0.83 per share. Finally, Stellantis should distribute FCA’s stake in Comau, which could be worth around € 1 billion, or € 0.32 per share, according to Fidentiis’ estimates. (All rights reserved)

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