European Regulators Finally Approve PSA/FCA Becoming Stellantis
Fiat Chrysler and PSA Group are reportedly in the homestretch of their $38 billion merger deal and on the cusp of becoming Stellantis — the planet’s fourth largest automaker by volume. The plan is to join forces to help absorb the monumental cost of developing alternative energy vehicles (like EVs) without losing any brands or shuttering any facilities that weren’t previously marked for death. We’re inclined to believe it when we see it, however, as the duo are also targeting an annual cost reduction of 5 billion euros (about $5.91 billion USD).
It also hasn’t been a smoothest of regulatory rides. After spending years hunting for the perfect partner, FCA and PSA had to adjust the terms of their existing deal to contend with losses incurred as a result of the pandemic response. But it all seems to be fine now and the European Commission has given approval and that’s what matters in finally getting this deal done.
While none of the involved parties decided to issue any comments, an announcement on the merger approval is expected soon. The automakers have previously said they could have the merger finalized in the first quarter of 2021, with us having little reason to assume that the timeline has changed. The companies are eager to start enacting those massive cost cuts and have estimated about 40 percent of savings will come from product-related expenses with another 40 coming from purchasing. The remaining 20 percent is supposed to be divided among marketing expenses, logistics, and information technology.
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