European Union Approves The Merger Between Fiat Chrysler And Peugeot Citroen


Image Credit – Economic Times


The European Union has finally approved the merger between the car giants Fiat Chrysler (FCA) and Peugeot Citroen (PSA) as the companies agreed to address the fears of the competitors. On Monday the European Union put some conditions on the merger of the two companies.

Both the companies announced the merger back in 2019 and are planning to finish the deal around early 2021. The tie-up will form Stellantic, which will be the fourth-largest automaker in the world regarding volume. And in terms of sales, it will be the third-largest.

The merged firm will bring brands such as Fiat, Peugeot, Alfa Romeo, Chrysler, Citroen, Jeep, and Maserati together in the global platform. All of these brands will still be manufactured under their own label.

According to the European Commission, after a thorough investigation of the fears of the competitors, they made their decision to approve the merger between the two elite companies.

In a statement, the commission said that the approval given to the merger is conditional ‘on full compliance with a commitments package offered by the companies.’

Brussels raised concern that the union between the two companies would have a negative impact on the sales of vans in Europe’s market. According to them, the vans generate good profits as they are easy to manufacture and have a good selling price.

The commission put forward a solution that PSA would still manufacture vans with Toyota and they will be sold under the Japanese brand in Europe.

The statement by the commission said that the unified brand will be giving the competitors easy access to its van repair and maintenance systems.

Margrethe Vestager, the competitor chief at the EU said that they are approving the merger between Fiat Chrysler and Peugeot SA only because they promise to give the competitors easy access to the repair and maintenance network of their small commercial vans.

He also explained that in the market with two active automotive manufacturers the competition will remain energetic even after the merger.

The FCA and the PSA agreed upon the conditions set by the European commission and ‘warmly welcomed’ their decision.

The Italian-American company FCA and the French PSA said that the shareholders need to approve the merger at a meeting on January 4. They want to finalize the deal by the end of the first quarter.

The merging between the companies is very important for both of the groups as huge investment is being made in the electric cars market to match the global consumer needs.

The global Coronavirus has had a huge impact on the global car market. As the sales slumped there were doubts over the merger.

As per the reports by the company, Fiat Chrysler has profited in the third quarter. They are apparently in a better place as the market recovers slowly.

PSA has also recovered from its 35 percent loss in the first half of the year.