Stellantis Merger Won’t Be the Last of Its KindResearch
With the European Commission authorising the merger of the automobile groups Fiat Chrysler Automobiles (FCA) from Italy and France’s Groupe PSA subject to conditions, the mega-merger has now materialised with Stellantis launching its IPO at the beginning of this week. The merged company is currently the sixth largest automotive group in the world. “This merger is not a singular occurrence, but part of a long-term trend of increasing mergers and acquisitions in the automotive industry,” says Professor Achim Wambach, president of ZEW Mannheim.
An evaluation by ZEW Mannheim based on the Zephyr database by Bureau van Dijk (BvD) shows that the number of M&A transactions in the automotive industry worldwide more than doubled between 2000 and 2019. The trend is most pronounced among auto parts manufacturers, with acquisitions by these companies tripling from 106 in 2000 to 302 in 2019.
When looking at M&A transactions by the country of the acquirer, an increasing consolidation of the automotive industry in China is clearly visible. In 2019, Chinese acquisitions accounted for nearly 40 per cent of all automotive industry mergers. While China’s global competitiveness in the production of internal combustion engines may be low, the country is on its way to establishing itself as a leading player in the production of electric vehicles and related components.
“The merger of FCA and PSA is part of a tectonic shift that can be observed in the automotive market. Structural change due to new drive concepts as well as increasing digitalisation is hitting this sector particularly hard. This change manifests itself in new technologies being developed and new companies, including from the digital sector, entering the market. The growing number of mergers in recent years is another sign of these developments. The merger of FCA and PSA will certainly not be the last of its kind,” says Achim Wambach.