Stellantis rises on its first day of trade after merging $ 52 billion

LONDON – Stellantis, the product of the $ 52 billion merger between Fiat Chrysler Automobiles and Peugeot, was welcomed by European investors on the first day of trading on Monday.

Shares of the world’s fourth largest carmaker by volume, which was created after the merger was completed on Saturday, surged 7.5 percent in afternoon trade after its launch on the Milan and Paris stock exchanges.

Shares listed in Milan started trading at 12.758 euros per share with a market value of 39.2 billion euros (47.3 billion dollars), and by the afternoon in Europe it had risen to 13.55 euros per share.

In a hypothetical launch on the Borsa Italiana website, Carlos Tavares, CEO of Stellantis, a former CEO of the PSA Group, said the merger would add 25 billion euros in value to shareholders over the coming years due to expected cost cuts.

“All of our employees and management teams are fully focused on creating the value embedded in the FCA-PSA merger and the creation of Stellantis,” he added.

Chairman John Elkan said the next decade is likely to “redefine mobility as we know it”.

“We have the size, resources, diversity and knowledge to successfully seize the opportunity of this new era in transportation,” he said.

“Our ambition is to build something unique and wonderful by providing our customers with distinctive, safe, comfortable, innovative and sustainable vehicles and services.”

The stock will be launched in New York when Wall Street opens on Tuesday, with US markets closed on Monday for a public holiday, after which Tavares will hold his first press conference as CEO of Stilantis.

The launch marks the culmination of the partnership talks that began in late 2018, and comes as the auto industry seeks to navigate a seismic shift in consumer demand for electric cars.

Prior to the deal, S&P Global Ratings raised FCA’s credit rating, expecting Stellantis to benefit from increased scale, geographic diversity and a strong capital structure.

“The combined entity will have a strong balance sheet, good free cash flow prospects and a large liquidity reserve,” Standard & Poor’s analysts Vitoria Ferraris and Margo Berry said in a note.

“In our fundamental case, Stellantis’ net cash position will fluctuate at around € 14 billion on an unadjusted basis. This will provide the group with a significant barrier to market conditions, which remain exposed to the mobility restriction risks associated with COVID-19 during the first half of 2021, and could suffer Of the gradual reduction of government support. “