Regulators Hit “Pause” on FCA-PSA Merger
Hopes by PSA Group and Fiat Chrysler Automobiles to finalize their merger early next year have been pushed back.
How far back depends on how quickly the two companies turn over unspecified data to the European Commission about their respective light-duty commercial vehicle operations.
The EC began an in-depth investigation a month ago into concerns that combining those businesses through a merger would reduce competition in the European market for vans rated less than 3.5 metric tons.
The proposed $47 billion merger would create a company that ranks fourth in vehicle sales behind Volkswagen, Toyota and the Renault-Nissan-Mitsubishi alliance.
Last year, the two companies produced 755,000 light commercial vehicles for Europe. About 400,000 of that total were vans built by a joint venture the two companies launched more than 40 years ago in Sevel, Italy. The venture currently makes vans marketed under the FCA’s Fiat brand and PSA’s Citroen, Opel, Peugeot and Vauxhall brands.
The commission points out that either FCA or PSA already leads the van markets in several European countries. Regulators fret that pooling those sales could give the merged company an unfair competitive advantage in 15 European countries, notably Belgium, France, Italy, Spain and the U.K.
FCA and PSA had hoped to complete their merger in the first quarter of 2021. That target still seems possible.
But everything will depend upon how quickly the EC gets the data it requested, whether it demands further details and, in any case, how much time it will need to reach a conclusion.
For now, the ball is back in FCA-PSA’s court to move the process along.
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