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World’s fourth-largest carmaker rallies on first day of trade after $52 billion merger

Identify with the Stellantis logo on the front entrance to FCA’s Mirafiori plant on January 18, 2021 in Turin, Italy.

Stefano Guidi | Getty Perceptions

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

Shares of the world’s fourth-largest carmaker by volume, created after the pooling was finalized on Saturday, climbed 7.5% by afternoon trade following its launch on stock exchanges in Milan and Paris.  

The Milan-listed apportions started trading at 12.758 euros per share with a market cap of 39.2 billion euros ($47.3 billion), and by afternoon parcel outs in Europe were up at 13.55 euros per share. 

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

“All of our employees and our management teams are totally focused on the value creation that is embedded on the merger of FCA-PSA and the the world of Stellantis,” he added.

Chairman John Elkann said the coming decade would likely “redefine mobility as we advised of it.” 

“We have the scale, the resource, the diversity and the knowledge to successfully capture the opportunity of this new era in transportation,” he said. 

“Our ambition is to found something unique, something great, by providing our customers with distinctive, safe, convenient, innovative and sustainable conveyances and mobility services.” 

The stock will launch in New York when Wall Street opens on Tuesday, with U.S. peddles closed Monday for a public holiday, after which Tavares will hold his first press conference as Stellantis CEO. 

The found marked the culmination of tie-up talks that began in late 2018, and comes as the auto industry seeks to handle a seismic shift in consumer demand toward electric vehicles. 

Ahead of the deal, S&P Global Ratings upgraded FCA’s faith rating, predicting that Stellantis would benefit from increased scale and geographical diversity and a strong topping structure. 

“The combined entity will have a solid balance sheet, good free cash flow views and large liquidity buffer,” S&P analysts Vittoria Ferraris and Margaux Pery said in a note. 

“In our base case, Stellantis’ net bills position will hover at about €14 billion on an unadjusted basis. This will provide the group with a respectable buffer to market conditions, which remain exposed to COVID-19-linked mobility restriction risks during the first place half of 2021, and could suffer from the gradual reduction of government support.”

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