The European Commission will check the legality of the Alliance Fiat-Chrysler with Peugeot
the European Commission has announced its intention to verify the legality of the unions of automakers, Fiat Chrysler and Peugeot. The cost of the transaction, which the parties agreed in December 2019, will amount to $ 50 billion. It is expected that eventually formed the structure, which will be included in the top five global companies in terms of production cars.
statement the European Commission says the deal could hurt competition in the light trucks market in Europe. Vice-President of the European Commission Margrethe Vestager underlines the importance of this mode of transport as for private transport companies and small businesses, and large companies. According to her, Brussels will maintain healthy competition in this sector.
Special attention of the European Commission is due to the fact that after the merger Fiat-Chrysler-PSA will control about a third of the European truck market, significantly outperforming the sales of Renault and Ford. The decision on the law and valid terms of the transaction, the Commission must rule within 90 days.
a Preliminary investigation shows that PSA and FCA have historically competed face-to-face for the vans in some countries-EU members, and the price has positioned their vans the same way. Thus, the merger eliminates an important competitive constraint to both of them.
in addition, the market for light commercial vehicles is characterised by relatively high barriers to entry and expansion, for example, the need to have a large enough service network, which is difficult to quickly set.