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Flag with the Stellantis logo on the main entrance of the FCA Mirafiori factory on January 18, 2021 in Turin, Italy.
Stefano Guidi | Getty Images
LONDON – Stellantis, the product of the $ 52 billion Fiat Chrysler Automobiles and Peugeot merger, was well received by European investors on its first day of trading on Monday.
Shares of the world’s fourth largest automaker by volume, created after the merger was finalized on Saturday, climbed 7.5% in the afternoon after its launch on the Milan and Paris stock exchanges.
Stocks listed in Milan started trading at 12.758 euros per share with a market cap of 39.2 billion euros ($ 47.3 billion), and by afternoon trades in Europe were on the rise. at 13.55 euros per share.
In a virtual launch on Borsa Italiana’s website, Carlos Tavares, CEO of Stellantis, former CEO of the PSA Group, said the merger would add € 25 billion in shareholder value over the next few years due to the expected cost reductions.
“All of our employees and management teams are totally focused on the value creation that is linked to the FCA-PSA merger and the creation of Stellantis,” he added.
President John Elkann has said that the coming decade will “likely redefine mobility as we know it”.
“We have the scale, the resources, the diversity and the knowledge to successfully seize the opportunity in this new era of transportation,” he said.
“Our ambition is to build something unique, something great, by providing our customers with distinctive, safe, practical, innovative and sustainable vehicles and mobility services.”
The action will launch in New York when Wall Street opens on Tuesday, with U.S. markets closed on Monday for a public holiday, after which Tavares will hold his first press conference as CEO of Stellantis.
The launch marked the culmination of reconciliation talks that began in late 2018 and comes as the auto industry seeks to navigate a seismic shift in consumer demand towards electric vehicles.
Prior to the transaction, S&P Global Ratings improved FCA’s credit rating, anticipating that Stellantis would benefit from increased scale and geographic diversity and a strong capital structure.
“The merged entity will have a strong balance sheet, good free cash flow prospects and a large liquidity cushion,” S&P analysts Vittoria Ferraris and Margaux Pery said in a note.
“In our baseline scenario, Stellantis’ net cash position will hover around 14 billion euros on an unadjusted basis. This will provide the group with a considerable buffer against market conditions, which remain exposed to the risks of mobility restrictions. related to COVID-19 during the first half of 2021, and could suffer from the gradual reduction in government support. “
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