| 3:50 PM EST

EU Opens Antitrust Probe into FCA-PSA Merger

Focus will be on small commercial vans, and maybe more
#Mitsubishi #Toyota #Renault


Facebook Share Icon LinkedIn Share Icon Twitter Share Icon Share by EMail icon Print Icon

Would competition suffer if PSA and Fiat Chrysler Automobiles merge?

The European Commission, which considers antitrust issues on behalf of the European Union, is launching a four-month-long investigation to find out.

The commission’s primary concern is Europe’s market for small commercial vans, where FCA and PSA compete with the likes of Ford and Renault (each with 16% shares of the market), Volkswagen (12%) and Daimler (10%).

An FCA-PSA merger would spawn a company that controls one-third of Europe’s light van market, more than twice the share of its nearest rivals. Sources told Reuters that EC regulators expressed their concern two weeks ago about that possible outcome.

Nix the Quick Fix

The would-be merger partners could have shortstopped a probe last week by quickly agreeing to broad brush actions, such as divestitures, to address the issue. That option expired today as the EC completed its preliminary review.

But experts say the decision to face an in-depth probe was a good strategic move. An extended investigation, they explain, will give FCA and PSA more wiggle room in which to minimize the necessary concessions with a more nuanced but favorable solution.

The companies may need similar maneuvering room elsewhere as well. Bloomberg News calculates that even bigger competitive questions loom in the minicar and small crossover sectors.

The news service says an FCA-PSA union could hike their share in that corner of the European car market to 65%. But it also says the potential antitrust issues in cars and vans are relatively small, compared with the overall size of the $47 billion deal.

Bottom Line

Antitrust questions are inevitable for a merger this big. After all, the outcome will be the world’s fourth-largest car company after Volkswagen, Toyota and the Renault-Nissan-Mitsubishi alliance.

But none of the challenges aired to date seems significant enough to sink the deal. The new probe may push back hopes of finalizing the merger next spring. But the plan itself is still on track.

Related Topics


  • The Changing Definition of 'Niche Vehicles'

    Once the playground of exotic car makers, the definition of a niche vehicle has expanded to include image vehicles for mainstream OEMs, and specialist models produced on high-volume platforms.

  • Designing the 2019 Ram 1500

    Ram Truck chief exterior designer Joe Dehner talks about how they’ve developed the all-new pickup. “We’ve been building trucks for over 100 years,” he says. “Best I could come up with is that this is our 15th-generation truck.”  

  • 2016 Prius: The Fourth Generation

    The little car that could still can. And this time as a car that not only gets great fuel economy, but which has ride and handling that makes it more than an econo-box (and its styling is anything but boxy).