FCA's merger with PSA hits a snag in Europe, report says
The companies' small-van market share has become a problem for European regulators, and without concessions, the merger could face a four-month investigation.
Fiat Chrysler Automobiles and France's PSA Group announced last October intentions to combine the automakers into one massive conglomerate, and since then, it's been smooth sailing through the regulatory process -- until now.
Reuters reported Monday that the merger has hit a speed bump as European regulators combed over FCA and PSA's small-van market share. According to the publication's sources, regulators will require concessions to ensure more competition within the small-van segment in Europe. Data shows FCA and PSA, which already jointly produce vans under a 50/50 joint venture, hold 34% of the market.
The automakers were reportedly told about the regulatory concerns last week and were given until this Wednesday to provide sufficient explanation or deliver a modified plan to regulators. If the companies don't, both automakers will face a four-month-long investigation after the initial merger review ends. The European Union gave a June 17 deadline for the preliminary review to wrap up.
Both FCA and PSA declined to comment on the news.
It doesn't sound like the issue has the potential to derail the merger plans, but it could certainly stall things. Both automakers agreed to combine their companies in a 50/50 merger of equals to tackle a shifting automotive industry. Notably, FCA had long courted automakers to redouble its efforts and consolidate within the industry.
With the merger, the FCA divisions, Jeep , Dodge , Chrysler, Ram , Fiat, Alfa Romeo and Maserati will join PSA Group's family of brands under one roof. They are Peugeot , Citroen, DS, Vauxhall and Opel. Those last two PSA recently purchased from General Motors in the US automaker's retreat from Europe.
