Monday 8 June 2020 11:50 am

European Commission set to scrutinise Fiat-PSA mega-merger

The European Commission may seek concessions in order to clear the proposed $50bn (£39.6bn) merger of Fiat Chrysler and Peugeot owner PSA over competition concerns.

Reuters reported that the body’s antitrust regulators were worried by the potential size of the two firm’s market share in small vans.

Read more: Peugeot maker PSA sales slump as coronavirus crashes car market

According to sources, the two firms must dispel the Commission’s doubts over the deal and offer concessions within the next two days.

If they do not meet the deadline, it was added, they will face a four-month long investigation into the deal.

The merger, which would create the world’s fourth-largest automotive company, was agreed in December.

It brings together PSA’s brands such as Peugeot, Opel and DS with the Italian firm’s Fiat, Jeep, Dodge, Ram and Maserati makes.

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The combined PSA-FCA business, which is yet to be branded, will chase annual $4bn cost savings through shares purchasing agreements and by combining technologies.

The tie-up comes as car makers struggle through a worldwide downturn in demand due to a variety of factors.

Once the merger completes, the combined entity will boast annual sales of 8.7m vehicles and revenues of almost  €170bn (£144bn) as well as an operating profit margin of 6.6 per cent.

Read more: Peugeot owner PSA roars to record profit as group prepares for Fiat merger

Both firms have hit back at suggestions that the current downturn caused by the coronavirus pandemic will affect the tie-up, which is due to complete early next year.

City AM has contacted PSA and Fiat Chrysler for comment.

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