On Monday morning, shareholders of Fiat Chrysler Automobiles (FCA) and France’s PSA -- parent company of Peugeot, Citroen and Opelar -- approved a merger of the two companies.
The $58 million tie-up will create the fourth-largest automaker in the world, behind Volkswagen, Renault-Nissan-Mitsubishi, and Toyota. The combined company will go by the name Stellantis.
Officials have said the merger will yield billions in annual savings and speed up the development of electric and autonomous vehicles. The deal is expected to wrap up by mid-January.
“We can approve the merger of Fiat Chrysler and Peugeot SA because their commitments will facilitate entry and expansion in the market for small commercial vans,” European Commission Vice President Margrethe Vestager said in a December press release.
‘Together we will be stronger’
PSA has been looking for a partner for the past decade, and Fiat-Chrysler is reportedly seeking to boost its presence in China, where PSA has a strong presence. The merger won approval from 99.15 percent of FCA shareholders and 99.85 percent of PSA investors, according to results from the online vote.
“Stellantis will be a sort of conglomerate of brands, some great and some not so good and most very regional,” said Jefferies analyst Philippe Houchois. “The merger will be a good opportunity for a reset.”
Those heading up the combined group said it will be better positioned to face the challenges spurred by the COVID-19 pandemic, one of which was last year’s double digit drop in global car sales. The deal will also supposedly help the group keep up with the shift to more technologically advanced vehicles.
“We are aware of the fact that together we will be stronger than individually,” Carlos Tavares, the PSA chief tapped to lead the combined group, told shareholders on Monday.