The European Commission (EC) has approved the Italian-American carmaker Fiat Chrysler Automobiles (FCA) merger with the French competitor PSA. The $38 billion merger will create the world’s fourth-largest carmaker, Stellantis.
However, the European Commission’s approval is conditional on companies complying with the promised measures to prevent the merger’s negative effects on competition. Based on its investigation, the commission feared that the merger could distort competition in the light commercial vehicle markets in nine EU Member States, including the Czech Republic and Slovakia. According to the Commission, this distortion of competition would probably lead to higher prices for customers.
One of the promised measures is the expansion of cooperation between PSA and the European division of the Japanese carmaker Toyota to produce light commercial vehicles. PSA manufactures commercial vehicles for Toyota, which are sold under this Japanese brand, mainly in the European Union countries. According to the commission, the expansion of cooperation will allow Toyota to compete with the Stellantis group in the future’s relevant markets.
“Access to a competitive market for small commercial vans is important for many tradesmen and SMEs across Europe,” said EC Vice-President Margrethe Vestager. As part of the promised measures, Fiat Chrysler and PSA will also give competitors access to their van repair network.
“The FCA and the PSA Group welcome the European Commission’s approval of the merger and creation of Stellantis,” the companies said today. They pointed out that the shareholders of both companies will approve the transaction on January 4. “The transaction is expected to close by the end of the first quarter of 2021,” they added.
The Fiat Chrysler Automobiles Group was established in 2014 by merging the Italian carmaker Fiat with Chrysler’s American partner.
The PSA Group owns the Peugeot and Citroën brands and in 2017 bought the Opel-Vauxhall carmaker from the American General Motors Group.
The name of the merged company Stellantis is derived from the Latin word stella (star). The merged company will also include Jeep, Alfa Romeo, Lancia, Abarth, and Dodge.