Fiat Chrysler will today seek investors’ vote to form Stellantis, a product of its merger with Peugeot maker PSA group. Todays’ vote is the last vote towards the merger, which will create the world fourth-largest automaker by market value. Stellantis will house 14 car brands including Peugeot, Vauxhall, Jeep, and Chrysler, as well as Maserati and Alfa Romeo.
Earlier today, investors at PSA Group approved the merge, who talks started two years ago. Upon today’s approval, the merger will be complete by the end of March.
Fiat Chrysler shareholders were paid $3.6 billion premerger dividends. Further, both companies are considering a 500 million euros distribution to each company before closing the deal, or 1 billion euros to shareholders post-merger.
Stellantis, which will be worth a combined value of close to $54 billion, will offer more finances to compete with leading automakers.
Stellantis bets on combined savings estimated at 5 billion euros, which could help the companies venture into electric vehicles and self-driving cars. Further, the merger is poised to boost returns and amass resources to muscle electric vehicles makers.
The new company will eye the Chinese market, which records annual vehicle sales of up to 21 million cars. If successful, the move will boost its global footprint, given its strong foothold in trucks and SUVs in North Ameria via Ram and Jeep and its excellence in Europe through Peugeot and Citroen.
However, Stellantis could face the ghosts of mergers past, coming from unfruitful merges of both Fiat Chrysler and PSA Group. Bloomberg reports that the Fiat – Chrysler merger is yet to communicate a clear transition of Maserati and Alfa Romeo to the new era of autonomous and electric vehicle accessibility which players like Tesla enjoy. Similarly, PSA’s Opel purchase increase its reliance on the crowded European market.