Shares in Stellantis rose as much as 7.5 percent on their first trading day on Monday after the company was created on Saturday with the completion of the merger between Fiat Chrysler Automobiles and Peugeot maker PSA Group.
“We have the scale, the resources, the diversity and the knowhow to successfully capture the opportunities of this new era in transportation,” Stellantis Chairman John Elkann said in a video on the Borsa Italiana website on Monday.
Stellantis CEO Carlos Tavares said the merger would add 25 billion euros ($30 billion) in value for shareholders over the years, thanks to projected cost cuts. “I can tell you that the focus from day one will be on the value creation that is the result of the implementation of those synergies,” Tavares said in the same video.
Milan-listed shares of Stellantis started trading at 12.758 euros and at 1000 GMT were up 7.5 percent at 13.51 euros. The Paris-listed shares traded around the same level. That compares with Fiat Chrysler’s (FCA) close on Friday at 12.57 euros.
The stock will debut in New York on Tuesday.
The listings of Stellantis are the culmination of talks then-PSA CEO Tavares initiated with his counterpart at Fiat Chrysler in late 2018.
Tavares, 62, will lead an automotive giant with about 400,000 employees and 14 brands into an uncertain future, where cars increasingly run off of batteries and software and the combustion engine meets its demise.
Tavares will hold his first press conference as Stellantis CEO on Tuesday, after ringing NYSE’s bell with Elkann.
Fiat Chrysler and PSA were worth a combined 39.4 billion euros ($47.6 billion) at the close of trading last week, a fraction of the $783 billion market capitalization of Tesla, the world’s most valuable automaker.
Over the weekend, PSA shares were exchanged into new FCA shares. All FCA shares were then renamed as Stellantis.
Intesa Sanpaolo analyst Monica Bosio said she expected markets would start pricing in synergies at Stellantis only once their impact becomes visible starting from the second half of this year.
“However, even excluding synergies, we continue to view Stellantis as underappreciated on all metrics in comparison with its most direct peers,” Bosio said in a note.
Fiat Chrysler and PSA have said Stellantis can cut costs by more than 5 billion euros a year without plant closures.
Reuters and Bloomberg contributed to this report
