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Morningstar’s Analysis

Valuation
Currency in EUR
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1-Star Price

PREMIUM

5-Star Price

PREMIUM

Economic Moat

PREMIUM

Capital Allocation

PREMIUM

Fiat Chrysler and Peugeot Shareholders Vote to Merge

Richard Hilgert Senior Equity Analyst

Analyst Note

| Richard Hilgert |

No-moat rated Fiat Chrysler and PSA Peugeot Citroen announced Jan. 4 that the shareholders of each company voted in special meetings to approve their merger into Stellantis. The companies expect the merger to close on Saturday, Jan. 16, with Stellantis shares trading in Europe on Monday, Jan. 18 and on the New York Stock Exchange on Tuesday, Jan. 19. In our view, the market has discounted the shares of both companies on concerns over high spending for vehicle electrification, management’s ability to deliver on its cost savings target, and Fiat Chrysler debt, which has increased to EUR 26.4 billion at the end of the third quarter 2020 from EUR 12.9 billion at year-end 2019 due to COVID-19. We think the market has valued Stellantis as though fundamentals will only deteriorate from historic levels.

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Company Profile

Business Description

PSA Peugeot-Citroen is Europe's second-largest automaker. Besides the eponymous brands, the company also owns the DSA luxury brand, Germany's Opel brand, and the U.K. brand Vauxhall. The company manufactures auto parts, modules, and systems through its 46.3% ownership in Faurecia. Financial services operations, owned in joint ventures with BNP Paribas and Santander, fund dealers' inventories and finance consumers' vehicle purchases. The company has alliances with Dongfeng, Fiat, and General Motors to increase scale and to create cost-savings opportunities.

Contact
7, rue Henri Sainte-Claire Deville, Steering Center
Rueil-Malmaison, 92500, France
T +33 155948100
Sector Consumer Cyclical
Industry Auto Manufacturers
Most Recent Earnings
Fiscal Year End Dec 31, 2020
Stock Type
Employees 208,780

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