European Union begins Fiat-PSA mega-merger probe
European Union officials have launched a four-month probe into the $50bn mega-merger between Peugeot owner PSA and Fiat Chrysler (FCA) over competition fears.
Antitrust regulators are concerned about the merged entity’s high market share in the lucrative small van sector.
Upon completion of the merger, the new Fiat-PSA company will control a third of the small van market on the continent, double that of rivals Renault or Ford.
The two firms had until last Wednesday to offer concessions, but declined to do so, automatically triggering a review and subsequent investigation.
The EU executive said today in a statement: “In many countries, either PSA or FCA is already the market leader in light commercial vehicles, and the merger would remove one of the main competitors”.
In response, the automotive giants reiterated their aim to close the deal by the first quarter of 2021.
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They added: “As we continue to make progress through our cross-company project teams, we will be detailing to the European Commission – and other regulators – the substantial benefits of the proposed merger to our customers, the European industry and each company”.
The deadline for the investigation has been set for 22 October. The merger has already been given the greenlight in the US, China, Japan and Russia.
The deal, which was agreed in December, will create the world’s fourth largest automotive firm.
The tie-up will bring together PSA’s brands such as Peugeot, Opel and DS with the Italian firm’s Fiat, Jeep, Dodge, Ram and Maserati makes.
The new entity, which will produce 9m cars a year, will chase annual $4bn cost savings through shares purchasing agreements and by combining technologies.