EU regulators probe Fiat Chrysler-PSA merger
June 17, 2020
European Union antitrust regulators are investigating the proposed mega-merger between Fiat Chrysler and the French PSA, which incorporates Peugeot, Citroen, Opel and other smaller brands.
Regulators are concerned that the merger may damage competition in 14 EU countries and the UK. Member states affected include Belgium, Croatia, the Czech Republic, France, Greece, Hungary, Italy, Lithuania, Luxembourg, Poland, Portugal, Slovakia, Slovenia and Spain.
The European Commission said it was particularly worried about the merger yielding a high market share in small vans. Such vans — commercial vehicles that weigh less than 3.5 metric tons — are technically easy to manufacture, but are sold at a high markup.
"With their large portfolio of brands and models, the two companies have a strong position in commercial vans in many European countries," said commission Vice-President Margrethe Vestager, who is responsible for competition in the bloc, in a statement. "There are fewer competitors in vans than in passenger cars, and in most of these countries, all competitors would be significantly smaller than the merged entity."
The Commission said that during a preliminary review of the deal, the two carmakers had declined to offer concessions on its concerns.
The probe will last 90 days.
Read more: PSA-Fiat Chrysler merger driven by global demands
Peugeot and Fiat Chrysler have previously said the 50-50 merger will save them €3.7 billion ($4.15 billion) in overall annual expenditure and allow them to work on creating more sustainable vehicles.
The merger would create the fourth largest car empire in the world. The plans were announced in October 2019, after an attempted merger between Fiat Chrysler and Renault fell apart over job loss concerns.
The Commission acts as the antitrust watchdog for the EU single market and can intervene if it deems that EU consumers' interests risk being undermined.
The two carmakers released a statement reiterating their goal of closing the deal by the end of the first quarter of 2021.
"As we continue to make progress through our cross-company project teams, we will be detailing to the EC [European Commission] — and other regulators — the substantial benefits of the proposed merger to our customers, the European industry and each company," they said in a joint statement.
aw/msh (Reuters, AFP)