Stellantis, a leading global automaker, made a significant move to bolster its U.S. market presence by acquiring First Investors Financial Services Group (“First Investors”) for approximately $285 million. This strategic acquisition, announced on September 1, 2021, marks Stellantis’ entry into the U.S. auto finance sector and is poised to transform its customer and dealer relationships. The all-cash transaction, finalized with F1 Holdings Corp., the parent company of First Investors, signals a clear commitment from Stellantis to establish a robust financial services arm in one of its most critical markets.
This acquisition is a game-changer for Stellantis. As CEO Carlos Tavares stated, owning First Investors provides Stellantis with a “white-space opportunity” to offer a comprehensive suite of financing solutions. Currently, Stellantis stands out as the only major Original Equipment Manufacturer (OEM) in the U.S. market without a captive auto finance company. By bringing First Investors under its umbrella, Stellantis gains immediate access to an established and high-performing financial platform. This move is expected to create substantial long-term value for Stellantis shareholders and significantly enhance customer loyalty through improved and integrated financial services.
The strategic rationale behind acquiring First Investors Financial Services is multi-faceted. Firstly, it addresses a critical gap in Stellantis’ U.S. operations. Having a captive finance company allows Stellantis to directly support its sales network and capitalize on its strong market position. This direct ownership means Stellantis can now offer a complete range of financing options, including retail loans, leases, and floorplan financing, directly to its customers and dealers. This capability is crucial in today’s competitive automotive landscape where financing is an integral part of the vehicle purchasing process.
Secondly, the acquisition of First Investors Financial Services is expected to be financially accretive. Stellantis anticipates significant earnings generation from its new finance arm, contributing directly to its bottom line. Furthermore, by controlling the financing process, Stellantis can enhance the overall customer ownership experience. In an increasingly digital age, seamless and integrated services are paramount. A captive finance company allows Stellantis to create a more connected and streamlined experience for customers purchasing vehicles from its award-winning brands such as Jeep®, Ram, Dodge, Chrysler, Fiat, and Alfa Romeo. This integrated approach is expected to foster stronger customer relationships and increased brand loyalty.
Tommy Moore, Jr., President and CEO of First Investors, expressed enthusiasm about the acquisition, emphasizing the long-term stability and growth opportunities it presents for First Investors and its employees. He noted that becoming part of Stellantis provides the resources to expand their product offerings and better support Stellantis’ auto sales growth. This synergy between First Investors’ established financial expertise and Stellantis’ automotive prowess creates a powerful combination poised for success in the U.S. market. The First Investors management team is committed to a swift and seamless integration into Stellantis, ensuring continued service to their existing dealer network and business partners throughout the transition.
Tommy Moore Jr., President and CEO of First Investors, emphasizes the growth potential and stability gained by joining Stellantis, enhancing First Investors Financial Services' capabilities.
The acquisition of First Investors Financial Services is subject to customary closing conditions and regulatory approvals, with the transaction expected to be finalized by the end of 2021. BofA Securities and Sullivan & Cromwell LLP advised Stellantis, while Ardea Partners LP and Goodwin Procter LLP served as advisors to Gallatin Point and First Investors.
About First Investors Financial Services
First Investors Financial Services Group has been a prominent player in the auto finance industry for over 32 years. Headquartered in Houston, Texas, the company specializes in originating and holding automobile finance receivables and promissory notes. They work with franchised auto dealers and vehicle owners through refinancing transactions. Their established network and expertise in auto lending make them an ideal platform for Stellantis to launch its captive finance operations.
About Stellantis
Stellantis stands as a global automotive leader and mobility provider, committed to offering freedom of movement through distinctive, affordable, and reliable solutions. With a rich heritage and a broad portfolio of iconic brands, Stellantis leverages its global presence and the diverse talents of its employees to drive sustainable performance. The company’s vision is to become the greatest, not just the biggest, automaker, creating value for stakeholders and the communities it serves. This acquisition of First Investors Financial Services underscores Stellantis’ commitment to strategic growth and enhancing its position in the global automotive market.
Forward-Looking Statements
Disclaimer: This article contains forward-looking statements based on current knowledge, expectations, and projections regarding future events and anticipated results. These statements are subject to risks and uncertainties that could cause actual results to differ materially. Factors that may affect future results include, but are not limited to, the consummation and timing of the transaction, regulatory approvals, integration of operations, market conditions, and economic factors. Readers are cautioned not to place undue reliance on forward-looking statements, which speak only as of the date of this article. Stellantis disclaims any obligation to update or revise these statements.
