Officials at Fiat Chrysler Automobiles (FCA) and Peugeot Citroën (PSA Groupe) are vowing to complete their planned merger by early next year, despite a recently announced, four-month investigation into the deal by European Union (EU) antitrust regulators.
The EU’s European Commission stated that it’s concerned the merger would give the combined company too much control of the commercial van market, specifically commercial vehicles less than 3.5 tonnes.
Executive Vice-President Margrethe Vestager, responsible for competition policy, says, “Commercial vans are important for individuals, [small- and medium-sized enterprises] SMEs, and large companies when it comes to delivering goods or providing services to customers. They are a growing market and increasingly important in a digital economy where private consumers rely more than ever on delivery services. Fiat Chrysler and Peugeot SA, with their large portfolio of brands and models, have a strong position in commercial vans in many European countries. We will carefully assess whether the proposed transaction would negatively affect competition in these markets and ensure that a healthy competitive landscape remains for all the individuals and businesses relying on commercial vans for their activities.”
In Belgium, Croatia, Czechia, France, Greece, Hungary, Italy, Lithuania, Luxembourg, Poland, Portugal, Slovakia, Slovenia, Spain, and the UK, PSA and FCA combined would hold high market shares, together with the widest range of brands and models across all sizes, regulators say.
The companies are particularly strong in the smaller van segment. There are fewer competitors in vans than in passenger cars, and in most of these countries, all competitors would be significantly smaller than the merged entity.
The investigation could slow or even halt the merger if regulators find the deal could create significant market dominance. The EU could demand that FCA or PSA sell off van lines to competitors to assure healthy competition, something the companies would loathe given the strong profit margins on commercial vehicles.
The Commission has until Oct. 22, 2020, to decide on how to proceed, however, the automakers don’t appear fazed by the announced investigation.
Following the announcement of the EU’s regulatory investigation, the companies issued plans to call the merged FCA-PSA company Stellantis, a name that won’t appear on any vehicles but will be prominent in corporate communications and on a few executive paychecks. Issuing that statement the companies said they still expect the deal to close by the end of Q1 2021.