Please ensure Javascript is enabled for purposes of website accessibility
Free Article Join Over 1 Million Premium Members And Get More In-Depth Stock Guidance and Research

Fiat Chrysler and Peugeot Shareholders Approve Merger

By Rich Duprey - Jan 4, 2021 at 11:39AM

You’re reading a free article with opinions that may differ from The Motley Fool’s Premium Investing Services. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. Learn More

New company will be called Stellantis and will trade on the NYSE and other global bourses.

Goodbye Peugeot ( PUGOY ) and Fiat Chrysler ( FCAU ), hello Stellantis! 

Shareholders of both French automaker PSA Group and Fiat Chrysler approved the merger of the two companies with a combined market value of about $54 billion.

The deal originally indicated the union of the two companies would create the fourth-largest global automaker by volume based on 2019 sales, but adjusted for 2020 COVID–19 impacts, Stellantis will reportedly rank sixth on the list in sales.

The executives of Fiat and PSA have said the merger will give them scale to put them on par with Toyota and Volkswagen and boost their returns.

Dashboard of Fiat Chrysler car

Image source: Fiat Chysler.

Ready to take on the world

The name of the new company, Stellantis, is said to come from the Latin verb stello, meaning "to brighten with stars." It will bring together a portfolio of well-known brands beyond just Fiat, Chrysler, and Peugeot, as it extends to include Dodge, Maserati, Alfa Romeo, Opel, and Citroen.

Industry site Edmunds forecasts 2020 industry sales will come in around 14.4 million, a 15% drop from last year, but Fiat Chrysler will experience a 17% decline to 1.8 million vehicles, held back in part by the Alfa Romeo and Maserati brands. Offsetting the decline is the strong Jeep and Ram truck divisions.

PSA is bringing a revitalized Peugeot and Citroen into the mix.

Fiat Chrysler shareholders will receive a special dividend of 2.9 billion euro (about $3.4 billion) before the merger is completed, reduced from 5.5 billion euros after PSA said the pandemic-damaged industry made the original payout too rich.

Together, Fiat Chrysler and Peugeot hope to use their combined strength to support investments in cleaner vehicles as well as streamline operations to reduce costs and improve profits. 

This article represents the opinion of the writer, who may disagree with the “official” recommendation position of a Motley Fool premium advisory service. We’re motley! Questioning an investing thesis – even one of our own – helps us all think critically about investing and make decisions that help us become smarter, happier, and richer.

Invest Smarter with The Motley Fool

Join Over 1 Million Premium Members Receiving…

  • New Stock Picks Each Month
  • Detailed Analysis of Companies
  • Model Portfolios
  • Live Streaming During Market Hours
  • And Much More
Get Started Now

Stocks Mentioned

Fiat Chrysler Automobiles N.V. Stock Quote
Fiat Chrysler Automobiles N.V.
Toyota Motor Corporation Stock Quote
Toyota Motor Corporation
$187.44 (1.54%) $2.85
Volkswagen Aktiengesellschaft Stock Quote
Volkswagen Aktiengesellschaft
$29.67 (4.14%) $1.18
Peugeot S.A. Stock Quote
Peugeot S.A.

*Average returns of all recommendations since inception. Cost basis and return based on previous market day close.

Related Articles

Motley Fool Returns

Motley Fool Stock Advisor

Market-beating stocks from our award-winning service.

Stock Advisor Returns
S&P 500 Returns

Calculated by average return of all stock recommendations since inception of the Stock Advisor service in February of 2002. Returns as of 12/08/2021.

Discounted offers are only available to new members. Stock Advisor list price is $199 per year.

Our Most Popular Articles

Premium Investing Services

Invest better with the Motley Fool. Get stock recommendations, portfolio guidance, and more from the Motley Fool's premium services.