A merger that forms the fourth largest automaker in the world under the name “Steelantes”.


Shareholders in the French “BSA” group and its US-Italian rival, “Fiat Chrysler”, agreed to merge yesterday, which would lead to the formation of the fourth largest automaker in the world by size under the name “Stilantis”.
According to the “French”, during a public meeting via the Internet, the shareholders approved more than 99.8 percent of the three decisions related to the merger, the date of which must be announced “very quickly”, according to the Chairman of the Board of Directors of PSA. And the future director of Stilantis, Carlos Tavares.
The result of the shareholders’ vote was expected, as it comes two weeks after the European Commission gave conditional approval to the mega-merger, which was announced in late 2019.
Partnering the half, delayed by the Covid-19 pandemic, is crucial for the two groups to make the necessary investments to transition to clean car technology.
“This merger is a matter of survival for the (Fiat) and (PSA) groups,” said Giuliano Nucci, professor of strategies at Milan Business School in Milan, referring to the “tremendous technological and strategic challenges” the two alliances face in addition to the economic damage. Caused by the epidemic.
The merger will allow Fiat-Chrysler to consolidate its presence in Europe and restore the French group to a foothold in the United States.
The “Stilantes” group will be ranked fourth in the world in terms of size in the automotive sector, behind three competitors, namely, Volkswagen, Renault-Nissan, Mitsubishi and Toyota, and third in terms of revenue with a workforce of more than 400,000 people. .
The new group will bring together factories such as “Peugeot”, “Citroen”, “Fiat”, “Chrysler”, “Jeep”, “Alfa Romeo” and “Maserati”, each of which will continue under its own brand names.
BSA and Fiat expect the merger to allow them to generate billions of euros in revenue annually.
Last November, Tavares said, “Only the most active, who has a Darwinian spirit (the ability to transform and adapt), will survive.”
The European Commission was concerned that the merger would affect competition in the small truck market in Europe, with the two groups together accounting for 34 per cent of the market share.
In order to allay those concerns, the Commission said that BSA will continue its agreement with Toyota to manufacture trucks of this type and sell them under the Japanese brand in Europe.
The disruptions caused by Covid-19, including the suspension of manufacturing for several weeks in the first half of 2020, forced BSA and Fiat Chrysler to change their terms of association in order to ensure that they continue to merge in an equal manner in terms of shares.
Fiat Chrysler agreed to reduce the exceptional profits to be distributed to its shareholders, while BSA agreed to share its 46 per cent stake in the French “Forecia” automotive equipment company among all the shareholders of the new group instead of sharing it among its shareholders alone. As was previously agreed upon.
So far, the two companies have shown relative resilience in the face of the epidemic.
Fiat Chrysler recorded a net profit of 1.2 billion euros in the third quarter of the year, compared to losses of 1.04 billion euros in the second quarter when most of the world was under lockdown.
BSA Group sales fell by 589,000 cars in the third quarter of 2020, but sold them at higher prices as part of a strategy to increase profitability and cash flow, which boosted sales by 1.2 percent.
At the time the merger was announced, Tavares confirmed that no factory would be closed, but unions in France still had doubts.
Frank Dunn, a representative of CFTC in BSA, said: “In general, it is a good insurance policy for the future of our group, and those who do not match the transformation risk being abandoned.
But he asked, “What synergies will you find? And what consequences will the sites have in France?”
In the context of the auto industry, the South Korean Hyundai Motor Company and its subsidiary Kia Motors yesterday expected their combined global sales to rise 11.5 percent in 2021, to rebound from the lowest level in ten years in 2020, as the two companies missed their annual targets for the sixth consecutive year.
According to “Reuters”, the two Korean companies said that they expect combined sales for 2021 at 7.08 million cars, to recover after a year ravaged by the Corona virus pandemic on the global economy.
For the year 2020, the two companies announced a 13 percent drop in their combined global sales to 6.35 million cars, the lowest level since 5.74 million in 2010, and far below the combined goal of the two companies set in January at 7.54 million.
Sales have been severely affected by the Coronavirus pandemic, in particular from the imposition of a renewed series of stay-at-home measures in recent months in several countries as part of efforts to stop the spread of Covid-19.
Before the announcement, shares of Hyundai Motor rose 9.9 percent to 211,000 won, the highest level since September, as investors strengthened their bets on developing electric cars this year.
In addition, a spokeswoman for the Japanese “Nissan” confirmed that Europe remains an important market for the company, denying the validity of a report on reducing its business in it.
According to the “German”, the “Bloomberg” news agency quoted the spokeswoman as saying: “The article reported by the Japanese newspaper” Yomiuri “is inaccurate. Europe is a very important market for Nissan, and we continue to introduce new models in it and focus on our strategy on car electrification.”
The report had stated that “Nissan” was planning to reduce its business in Europe, and that “Renault” would take over the sales. The newspaper reported that “Nissan” will cut distribution channels in 30 countries.


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