On 17 June 2020, the Commission has opened an in-depth investigation to assess the proposed merger of Fiat Chrysler Automobiles N.V. (“FCA”) and Peugeot S.A. (“PSA”), notified on 8 May 2020, under the EU Merger Regulation.

Both FCA, headquartered in the UK, and PSA, headquartered in France, are active in the manufacturing and supply of passenger vehicles and light commercial vehicles in the European Economic Area (EEA), where they are market leaders with regard to light commercial vehicles. Therefore, the Commission is concerned that the proposed transaction, as originally notified, could significantly reduce competition in 14 European Member States and the UK.

More particularly, since PSA and FCA have been historically competing head-to-head in the market, the merger would remove an important competitive constraint for both of them, resulting in an entity against which it would be extremely difficult to compete in an effective way. Most of its possible competitors, indeed, would be significantly smaller, and should confront themselves in a market characterised by relatively high barriers to entry, such as the need to have a sufficiently large service network.

None of the two companies submitted commitments during the initial investigation to address the Commission’s preliminary concerns, which now has 90 working days, that is until 22 October 2020, to take a decision.

Marco Stillo