The European Commission reported this Monday that it approved the proposed merger between the automotive companies Fiat Chrysler Automobiles (FCA) and Peugeot S.A. (PSA).
Approval is conditional on full compliance with a package of commitments offered by the companies.
Executive Vice President Margrethe Vestager, Head of Competition Policy, said: “Access to a competitive market for small commercial vans is important for many self-employed and small and medium-sized businesses across Europe. We can approve the merger of Fiat Chrysler and Peugeot SA because their commitments will facilitate entry and expansion into the market for small commercial vans. In the other markets where the two automakers are currently active, competition will continue to be vibrant after the merger.»
This decision follows an in-depth investigation of the merger proposed by the European Commission, which combines FCA and PSA, two major global automotive companies.
Both companies operate around the world, with a strong manufacturing base in the European Economic Area (EEA).
The transaction will lead to the creation of the fourth largest automotive group in the world, to be called “Stellantis”.
Fiat chrysler
During its in-depth investigation, the European Commission gathered extensive information and feedback from competitors and customers of the merged companies.
Following its investigation, the European Commission was concerned that the transaction, as initially notified, would have hurt competition in the small light commercial vehicle market in nine EEA Member States (Belgium, Czechia, France, Greece, Italy, Lithuania, Poland, Portugal and Slovakia), where the companies have high or very high combined market shares and are particularly close competitors. Therefore, the acquisition likely would have resulted in higher prices for customers.
The proposed remedies
To address the Commission’s concerns, Fiat Chrysler and PSA offered the following commitments aimed at allowing entry and expansion:
An extension of the cooperation agreement currently in force between Fiat Chrysler and Toyota Motor Europe (Toyota) for small light commercial vehicles under which PSA produces the vehicles for sale by Toyota under the Toyota brand primarily in the European Union.
This will be done through increased capacity available to Toyota and reduced transfer prices for vehicles and associated parts/accessories. This commitment reflects the ubiquitous nature of platform sharing in the automotive sector.
It also implies the modification of the “repair and maintenance” agreements for passenger cars and light commercial vehicles in force between PSA, FCA and their repair networks, to facilitate the access of competitors to the PSA and FCA repair and maintenance networks for vehicles. light commercials.
For example, a brand-specific front desk, waiting area, or entrance will not be required for FCA/PSA light commercial vehicle customers, and any prohibition on repairers from using PSA/FCA tools and equipment to service vehicles will be lifted. competitive light commercial vehicles.
The Commission concluded that the first solution will allow Toyota to compete effectively with the merged entity in the relevant markets in the future.
In addition, the second remedy will help new entrants to expand and compete in the light commercial vehicle markets. The combination of these commitments allows the maintenance of effective competition in the market after the transaction and thus fully addresses all the Commission’s competition concerns.
Therefore, the Commission concluded that the transaction, as modified by the undertakings, would no longer raise competition concerns. This decision is conditional on full compliance with the commitments.
Companies and products
UK-based Fiat Chrysler Automobiles manufactures, supplies and distributes passenger cars and light commercial vehicles under the Fiat, Chrysler, Jeep, Alfa Romeo, Lancia, Abarth, Dodge, Ram and Fiat Professional brands.
In addition, Fiat Chrysler owns the automotive casting company Teksid SpA, the plastic component and module companies Plastic Components and Modules Automotive SpA, and the automotive production systems company Comau SpA.
Fiat Chrysler also provides financing to customers and dealers to support the sales of Fiat Chrysler vehicles.
France-based PSA manufactures, supplies and distributes passenger cars and light commercial vehicles under the Peugeot, Citroën, Opel, Vauxhall and DS brands.
Through its subsidiary, Faurecia S.A., it also participates in the manufacture and supply of automotive interior components. PSA also offers ancillary services such as financing solutions for the acquisition of motor vehicles, as well as mobility services and solutions.
