Stellantis recovers on the primary day of buying and selling after a merger of $ 52 billion
Flag with the Stellantis logo on the front entrance of the FCA Mirafiori plant on January 18, 2021 in Turin, 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 Monday’s first day of trading.
The shares of the fourth largest automaker in the world, created by the volume of the merger on Saturday, rose 7.5% in the afternoon after the IPO in Milan and Paris.
The shares, listed on the Milan Stock Exchange, traded at a price of € 12.758 per share with a market capitalization of € 39.2 billion ($ 47.3 billion). By the afternoon, business in Europe had risen by 13.55 euros per share.
In a virtual launch on the Borsa Italiana website, Carlos Tavares, CEO of Stellantis, former CEO of PSA Group, said the merger would bring shareholders € 25 billion in added value over the coming years due to projected cost reductions.
“All of our employees and management teams are fully focused on the value creation that is anchored in the FCA-PSA merger and the creation of Stellantis,” he added.
Chairman John Elkann said the next decade will likely “redefine mobility as we know it”.
“We have the size, the resource, the diversity and the knowledge to capitalize on the opportunity of this new era in transportation,” he said.
“Our goal is to create something unique and great by providing our customers with distinctive, safe, comfortable, innovative and sustainable vehicles and mobility services.”
The stock will be launched in New York when Wall Street opens on Tuesday. US markets are closed on Monday for a public holiday. After that, Tavares will hold his first press conference as Stellantis CEO.
The start was the highlight of the liaison talks that began at the end of 2018. The auto industry is trying to control a seismic shift in consumer demand towards electric vehicles.
In advance of the transaction, S&P Global Ratings improved the FCA’s credit rating and forecast that Stellantis would benefit from greater size, geographic diversity and a strong capital structure.
“The combined company will have a solid balance sheet, good free cash flow prospects and a large liquidity buffer,” S&P analysts Vittoria Ferraris and Margaux Pery said in a note.
“In our base case, Stellantis’ net cash position will be around € 14 billion unadjusted. This will provide the Group with a significant buffer for market conditions that remain exposed to COVID-19-related mobility restriction risks during the first half of 2021 and could be below suffer from the gradual reduction in government support. “