Brussels (Brussels Morning) The EU Commission has approved the proposed merger between Fiat Chrysler Automobiles (FCA) and Peugeot (PSA), according to a press release issued yesterday.
The decision follows the Commission’s investigation of the planned merger between the two major automotive groups, each of which operates worldwide with an industrial base in the EU.
The Commission’s approval is conditional on compliance with the commitments package that FCA and PSA offered.
EU Commissioner for Competition Margrethe Vestager notes the merger should not jeopardise market competition in the segments where the two groups are active. In fact, she added, to judge by the commitments they have entered, their merger “will facilitate entry and expansion in the market for small commercial vans.”
The merger will result in the creation of the world’s fourth-largest automotive group.
Findings and remedies
The Commission notes it gathered information from competitors of the FCA and the PSA groups as well as from customers within the remit of its in-depth investigation.
Following the investigation, the Commission had warned that the proposed merger would have negative effects on competition in the light commercial vehicle segment in Belgium, France, Greece, Italy, Lithuania, Poland, Portugal, Slovakia and the Czech Republic, where the two groups are close competitors.
By way of response, FCA and PSA offered a package of commitments to ease the Commission’s concerns, including an extension of cooperation agreements between PSA and Toyota, and amendments to agreements between PSA, FCA and their repairer networks. The former should help Toyota maintain a foothold in the market and the latter should facilitate access for competitors to the groups’ repair networks for light commercial vehicles.
Their assurances fully addressed the Commission’s concerns since they should allow Toyota to compete effectively with the new entity and prevent the stifling of competition in the light commercial vehicles segment.
Effective market competition can be maintained after the merger, the Commission notes, reiterating that its approval is conditional upon compliance with the commitments package.
Having wrapped up the PSA/FCA merger investigation, the Commission is looking into six other proposed mergers, with in-depth investigations currently underway.
