Flag with the Stellantis logo at the front entrance of the FCA Mirafiori factory on January 18, 2021 in Torino, 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 its first day of trading on Monday.
The shares of the world’s fourth largest automaker by volume, created after the merger ended on Saturday, rose 7.5% in afternoon trading after its launch on the Milan and Paris stock exchanges.
The shares listed in Milan started trading at 12,758 euros per share, with a market value of 39.2 billion euros (US $ 47.3 billion), and in the afternoon business in Europe rose to 13.55 euros per share .
In a virtual launch on the Borsa Italiana website, Stellantis CEO Carlos Tavares, former CEO of the PSA Group, said the merger would add € 25 billion in value to shareholders in the coming years due to projected cost cuts.
“All of our employees and management teams are fully focused on creating value that is embedded in the merger of FCA-PSA and the creation of Stellantis,” he added.
President John Elkann said the next decade is likely to “redefine mobility as we know it”.
“We have the scale, the resources, the diversity and the knowledge to successfully capture the opportunity of this new era in transportation,” he said.
“Our ambition is to build something unique, something great, providing our customers with different, safe, convenient, innovative and sustainable vehicles and mobility services”.
The shares will be launched in New York when Wall Street opens on Tuesday, with US markets closed on Monday for a holiday, after which Tavares will hold his first press conference as CEO of Stellantis.
The launch marked the culmination of the deal negotiations that began in late 2018 and comes at a time when the auto industry seeks to navigate a seismic shift in consumer demand for electric vehicles.
Prior to the deal, S&P Global Ratings raised FCA’s credit rating, anticipating 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 prospects for free cash flow and a large liquidity reserve,” said S&P analysts, Vittoria Ferraris and Margaux Pery, in a note.
“In our base case, Stellantis’ net cash position will be around € 14 billion on an unadjusted basis. This will provide the group with considerable protection from market conditions, which will remain exposed to the mobility restriction risks associated with COVID-19 during the first half of 2021, and may suffer from the gradual reduction in government support. “