By Gilles Guillaume and Giulio Piovaccari
PARIS/MILAN (Reuters) – Shareholders in Fiat Chrysler (FCA) and Peugeot owner PSA gave their blessing on Monday to a $52 billion mega-merger, one of the last steps towards creating Stellantis, the world’s fourth largest automaker.
With annual production of around 8 million vehicles worldwide and revenues of more than 165 billion euros ($203 billion), Stellantis is expected to play a key role in the auto industry’s jump into the new era of electrification.
Stellantis will have 14 brands, from FCA’s Fiat, Maserati and U.S.-focused Jeep, Dodge and Ram to PSA’s traditionally Europe-focused Peugeot, Citroen, Opel and DS.
At two separate extraordinary shareholder meetings, held virtually due to the pandemic, investors in each group backed the merger with approval rates above 99% of votes cast.
“We are ready for this merger,” PSA Chief Executive and Stellantis future CEO Carlos Tavares said, adding that the date for the closure of the deal would be announced shortly. He said the deal had now passed all regulatory tests.
Tavares will have to revive the carmaker’s fortunes in China, rationalize a sprawling global empire and address massive overcapacity, as well as focus like rivals on creating cleaner cars.
FCA Chairman John Elkann, the future chairman of Stellantis, said the new automaker would “play a leading role as the next decade redefines mobility”.
FCA CEO Mike Manley, who will head key north American operations for Stellantis, said 40% of the expected synergies form the merger – projected at more than 5 billion euros, will come from convergence of platforms and powertrains and from optimizing R&D investments.
Manley said 35% of synergies would be driven by savings on purchases, while another 7% would come from savings on sales operations and general expenses.
The remainder of the synergies are expected from the optimization of other functions including logistics, supply chain, quality and after-market operations, he added.
FCA and PSA pledged not to close any plants after the merger. [Editor's note: Let's see how this pledge holds up in a year.]
($1 = 0.8140 euros)
Reporting by Gilles Guillaume and Sarah White in Paris, Valentina Za and Giulio Piovaccari in Milan; Editing by Kirsten Donovan, Mark Potter, David Clarke and Alexander Smith.