REUTERS / Christian Hartmann
PSA boss Tavares: With the merger of PSA and Fiat Chrysler, the manager finally wanted to climb into the league of large car brushes
For months, PSA chief Carlos Tavares and FCA chief Mike Manley negotiated a merger. In December of last year, they finally announced the merger. But now the two car managers are not only slowing down the corona crisis, but also the EU Commission.
The megafusion of the car manufacturer Fiat Chrysler Automobiles (FCA) Show stock market chart with the Opel mother PSA Peugeot Citroën Show stock market chart has slowed down for the time being: The EU Commission has concerns and therefore initiated an in-depth investigation into the case on Wednesday, which could drag on until October 22. The background to this is the fear that the merger of the two vehicle manufacturers could restrict competition in the van market.
PSA boss Carlos Tavares (61) and FCA CEO Mike Manley had the merger of the two car makers back and forth in December of last year announced. Tavares is said to bring the two empires together and build the fourth largest automaker in the world.
But now EU Competition Commissioner Margrethe Vestager is sending them in between. She is opposed to the fact that the new group would also have high market shares in the delivery van segment up to 3.5 tons in many countries. Unlike the car market, there are fewer providers and high entry barriers for competitors, said Vestager.
So far, both vendors have competed head-to-head in many markets and have adjusted their prices accordingly. This could be eliminated in the event of a merger, the Commissioner argues. Specifically, competition could be restricted in 14 EU countries and Great Britain.
Car sales in Europe slumped 52 percent in May
“Vans used for business are important for individuals, medium-sized businesses and large companies if they want to bring their goods or services to customers,” Vestager said. Fiat and PSA would have a strong market position. “We will carefully review whether the proposed transaction would have a negative impact on competition in these markets.” The goal is healthy competition.
The companies notified their merger to the Commission on 8 May. Vestager stressed on Wednesday that during the preliminary review, companies would not have made any commitments to address the concerns. The Commission now has a further 90 working days for an in-depth examination. That this was initiated, however, does not allow any conclusions to be drawn about the outcome.
Also read:The auto industry after the big dealCarlos Tavares – Europe’s toughest car manager
FCA and PSA said on Wednesday that they are committed to completing the merger by late March next year at the latest. Accordingly, you continue to work constructively with the Commission. “Preparations for the merger are proceeding as planned.” The respective competition authorities have already given the green light in the USA, China, Japan and Russia.
The corona crisis has meanwhile changed the circumstances of the deal and put the car industry under further pressure. Sales and registrations of new cars have plummeted. They lay behind in May Information from the Acea industry association a good 52 percent below the figure for the same month in the previous year.
In addition to Opel, PSA also carries the Peugeot, DS and Citroën brands. Fiat Chrysler offers the brands Alfa Romeo, Chrysler, Dodge, Jeep, Lancia or Maserati.
Fiat Chrysler and PSA together sold around 8.7 million vehicles a year before the crisis and had a turnover of 170 billion euros. The merger would create an auto giant. Only Volkswagen, Toyota and the French-Japanese Renault-Nissan group were bigger last year. According to earlier information from the French Ministry of Economic Affairs and Finance, around 400,000 people were employed before the merger plans.
mg with material from dpa