Antitrust Law Daily Fiat Chrysler/Peugeot combination will get a close look from EC
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Wednesday, June 17, 2020

Fiat Chrysler/Peugeot combination will get a close look from EC

By Jeffrey May, J.D.

In-depth investigation will consider deal’s competitive impact on light commercial vans in 15 European countries.

The European Commission (EC) announced today that it has opened an in-depth or Phase II investigation into the proposed merger of automotive companies Fiat Chrysler Automobiles N.V. (FCA) and Peugeot S.A. (PSA). The EC said that it will assess the deals impact on the market for light commercial vehicles (vans) in 14 European Union Member States and the United Kingdom. In many of these countries, PSA and FCA combined would hold high market shares, according to the announcement. The EC has until October 22 to either clear the deal with or without conditions or prohibit the merger.

When the parties announced that they had signed a binding agreement to merge in December, saying that they expected to complete the deal in 12-15 months. They say that the merger would create the fourth largest global automotive OEM by volume and third largest by revenue. Volkswagen and Toyota usually vie for the top spot.

The EC’s preliminary investigation showed that PSA and FCA have historically competed head-to-head for vans in a number of EU Member States and price positioned their vans similarly. The merger would thus remove an important competitive constraint for both of them.

The parties announced that they had signed a binding agreement to merge in December, saying that they expected to complete the deal in 12-15 months. They said that the merger would create the fourth largest global automotive OEM by volume and third largest by revenue. Volkswagen and Toyota usually vie for the top spot.

PSA is reported to be the leader in the light commercial vehicle segment in Europe with a 24.7 percent market share in 2018. FCA offers light commercial vehicles through its Fiat Professional unit.

Peugeot stopped auto sales in the U.S. market in the 1990s. Early last year, there were reports that the PSA was planning a return to the United States in the coming years. Whether the merger would change PSA’s plans is unclear.

Attorneys: (Sullivan & Cromwell LLP), (De Brauw Blackstone Westbroek) and (Darrois Villey Maillot Brochier) for Fiat Chrysler Automobiles N.V. (Bredin Prat) for Peugeot S.A.

Companies: Fiat Chrysler Automobiles N.V.; Peugeot S.A.

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