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Competition : the EU is going to investigate the merger between Fiat Chrysler and PSA

The two groups could give birth to the number 4 worldwide in the sector. The Commission is concerned that the transaction affects competition on some vehicles.

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Competition : the EU is going to investigate the merger between Fiat Chrysler and PSA

The two groups could give birth to the number 4 worldwide in the sector. The Commission is concerned that the transaction affects competition on some vehicles.

The european Commission has announced on Wednesday the opening of an in-depth investigation on the proposed merger between car manufacturers PSA (Peugeot, Citroën) and Fiat Chrysler (FCA), fearing a reduction in competition.

The two groups, which could give birth to the number 4 worldwide in the sector, occupy a strong position" on the commercial vehicle market, explained the european commissioner for Competition, Margrethe Vestager. "We will assess carefully whether the proposed transaction will have a negative impact" on the market in terms of competition, she added.

READ ALSO >> Merge PSA/Fiat Chrysler : the magician John Elkann

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The proposed merger was notified to the Commission on 8 may. After a preliminary investigation, the two groups had decided not to submit commitments, such as divestments of businesses or sites, for example - to address the concerns of Brussels. The eu executive now has until 22 October 2020 to make its decision.

The merger could be finalized in early 2021

The Commission is concerned that the proposed transaction will not reduce competition in light commercial vehicles of less than 3,5 tonnes in 14 member States (Belgium, Croatia, Czech Republic, Spain, France, germany, Greece, Hungary, Italy, Lithuania, Luxembourg, Poland, Portugal, Slovakia, Slovenia, spain), as well as in the United Kingdom. "In many of these countries, PSA and FCA would hold all of the high market shares, as well as the largest variety of brands and models of all sizes", she says.

READ ALSO >> Automotive : PSA wants to reclaim the United States

The merger between the manufacturer italo-american (Fiat, Chrysler, Jeep, Maserati, Alfa Romeo, Dodge and Ram) and the French PSA (Peugeot, Citroën, DS, Opel and Vauxhall) must give birth to the number 4 worldwide in the sector.

Together, the two groups have accumulated in 2019 of approximately 170 billion euros in revenue and has sold nearly 8 million vehicles. They remain determined to finalize their merger late 2020-early 2021, despite the pandemic of coronavirus which has caused the collapse of the automobile market and led to each of them a heavy quarterly loss.

sales decline

The sales of Fiat Chrysler tumbled 16% in the first three months of the year, 20,56 billion euros. The group has sold over this period 818 000 vehicles, that is 21% lower than a year ago. PSA has seen its sales tumble by 15.6%, to 15.2 billion euros. It sold 627 000 vehicles, that is to say 29% less than last year.

Read our complete file

a record Year for PSA, which pays an incentive award of 4000 euros to its employees Automobile : PSA wants to reclaim the United States The union between PSA and Fiat-Chrysler sealed with an agreement of merger

The second quarter looks even worse, with one european automobile market in berne, affected by the closure of dealers in many countries.

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