New thump on the lists for the two car manufacturers destined to join: the EU Commission could deepen the theme of concentration in the mini-van segment
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Fiat Chrysler and Peugeot react with substantial drops in front of the concrete possibility that the merger operation will slip by a few months due to the will of the EU Commission to open an investigation to verify some Antitrust criticalities deriving from the operation.
EU Commission ready for phase 2 on the FCA-PSA dossier
In the generalized decline in all European stock markets, the automotive Stoxx600 index lost 4%, while Fiat Chrysler are among the worst of their respective Ftse Mib and Cac40 baskets. According to the rumors circulated more consistently since the evening of 10 June, the European Commission on 17 June should opt for the opening for a second phase of analysis on the dossier of the aggregation between the two car manufacturers because, as noted by Il Sole 24 Hours, the groups did not present solutions to the critical issues raised by the EU Antitrust.
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The mini-van segment and concentration risk
The findings concern in particular the prospect, in the event of aggregation, of a concentration in the mini-van segment. The combination of the FCA and Peugeot market shares would in fact lead the new group to hold about a third of the volumes. The examination by the EU Commission could take another 4 months and probably lengthen the time of the operation: currently the announced time is to conclude the deal by the first quarter of 2021. Before today’s fall on the stock exchange, FCA lost 7% approximately in two sessions, while Peugeot 7.7%.
“Knowing that both Tavares and Manley have always declared that they would do anything to solve the problems raised by the antitrust authority, we believe it is only a question of lengthening the time while we do not see any risks for the merger”. This is the comment of the analysts of Equita Sim.