The european Commission has announced, on Wednesday, the opening of a thorough investigation of the merger between car manufacturers PSA (Peugeot, Citroën) and Fiat Chrysler (FCA), fearing a reduction in competition on the market of commercial vehicles.
The two groups, which could give birth to the number 4 worldwide in the sector, occupy a strong position "in this market," said european commissioner for Competition, Margrethe Vestager. "We will assess carefully whether the proposed transaction will have a negative impact" on the market, she added.
"The two companies will continue to cooperate with the european Commission to reply to its questions in the same constructive spirit that has defined the project of fusion since the beginning," responded a spokesman for PSA with the AFP.
"PSA and FCA reaffirmed the common objective to conclude the transaction by the end of the first quarter of 2021," he added.
The proposed merger was notified to the Commission on 8 may. After a preliminary investigation, the two groups had decided not to submit commitments, such as divestments of businesses or sites, for example, to respond to the concerns of Brussels.
The eu executive now has until 22 October 2020 to make its decision.
The Commission is concerned that the transaction will not reduce competition in light commercial vehicles of less than 3,5 tonnes in 14 member States (Belgium, Croatia, Czech Republic, Spain, France, germany, Greece, Hungary, Italy, Lithuania, Luxembourg, Poland, Portugal, Slovakia, Slovenia, spain), as well as in the United Kingdom.
The merger risk, according to it, remove a significant competitive constraint for the two parties ", which is all the more problematic that" a new entry on the market seems unlikely on a significant scale ".
Collection of trademarks
The merger between the manufacturer italo-american (Fiat, Chrysler, Jeep, Maserati, Alfa Romeo, Dodge and Ram) and the French PSA (Peugeot, Citroën, DS, Opel and Vauxhall) must give birth, with this collection of brands, at number 4 worldwide in the sector.
Together, the two groups have accumulated in 2019 of approximately 170 billion euros in revenue and has sold nearly 8 million vehicles. They are always said to be determined to finalize their merger late 2020-early 2021, despite the pandemic of coronavirus which has caused the collapse of the automobile market and led to each of them a heavy quarterly loss.
The sales of Fiat Chrysler tumbled 16 % in the first three months of the year, 20,56 billion euros. The group has sold over this period 818 000 vehicles, that is 21 % lower than a year ago.
PSA has seen, him, his sales plummet 15.6 %, to 15.2 billion euros. It has sold 627 000 vehicles, that is to say 29% less than last year.
The second quarter looks even worse, with one european automobile market in berne, affected by the closure of dealers in many countries.
The commercial vehicle market, models are technically rudimentary, but sold at good prices, is very lucrative in Europe.
PSA weighed in 2019 more than a quarter of this market on the continent. The Fiat group adds 9 % more. All cumulerait, therefore, more than 34% of market share, which is two times more than the number 2, the Renault, which is 16.4 %.p> Updated Date: 17 June 2020, 12:33