The planned merger of Fiat Chrysler Automobiles (FCA) and Peugeot Citroen (PSA) is facing a lengthy EU competition probe according to a Reuters report.
The report said the two companies failed to offer concessions to allay EU antitrust concerns and cited ‘people familiar with the matter’.
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Reuters reported that the companies have been informed by the EU that their combined high market share in light commercial vehicles (LCVs) was a concern for competition regulators. Moreover, they had until yesterday to submit concessions in that area, but failed to do so, the report said, triggering a four month long investigation by the European Commission when it completes its preliminary review on 17 June.
The Financial Times also reported that the two companies are reluctant to sell their van divisions (said to be lucrative business units for both), but might be forced to do so after the EC probe. The report also suggested that the merger will nevertheless eventually be cleared by the EU authorities with the two companies factoring in such a probe due to the large size of the merger deal.
Last month, FCA and Exor chairman John Elkann said the terms of the FCA-PSA merger agreement were unchanged and that the rationale for the merger was ‘stronger than ever’ now that the COVID-19 pandemic adds to the list of challenges facing the automotive industry. He also said that preparatory work for the merger was on schedule for completion by early 2021 as initially announced.
The planned merger would create the 3rd largest global car company by revenues and 4th largest by volume. The new company will be led by current PSA chief Carlos Tavares and a big part of the rationale behind the move is to have the greater scale and resources to be at the forefront of the long-run CASE megatrends that are impacting mobility and the transport industry.
