Fiat-PSA mega-merger faces months-long competition probe
The $50bn mega-merger between car giants Fiat Chrysler and Peugeot owner PSA is facing a four-month competition probe from European antitrust officials after the companies failed to provide requested concessions.
Over the weekend it emerged that the two firms had been warned by the European Union over their combined high market share in small vans.
Upon completion of the merger, the new Fiat-PSA entity will control a third of the small van market on the continent, double that of Renault or Ford.
Fiat Chrysler and PSA were given until last night to make concessions, but did not do so, meaning an investigation will automatically begin after authorities complete an initial review next week.
The deal, which was agreed in December and would create the world’s fourth largest automotive firm.
A source told Reuters that the investigation was unlikely to push back the date of completion, which is expected in early 2021.
It said: “It is a huge and complicate deal, we know how things work and so we knew that a full probe was an option. Which by the way would not cause any delay to the time frame we face for the merger”.
The FT said that the deal was expected to be cleared by the EU in the end.
The tie-up will bring together PSA’s brands such as Peugeot, Opel and DS with the Italian firm’s Fiat, Jeep, Dodge, Ram and Maserati makes.
The new entity, which will produce 9m cars a year, will chase annual $4bn cost savings through shares purchasing agreements and by combining technologies.
PSA and Fiat Chrysler declined to comment on the situation.