EU Commission Approves Fiat Chrysler-PSA Merger... "Concerns Over Monopoly Resolved"

Merger Procedures Expected to Complete by 1Q Next Year
New Corporation Name 'Stellantis'...50-50 Equity Split
Post-Merger Production Ranks 4th Globally...Operational Cost Reduction Anticipated

[Image source=Reuters Yonhap News]

[Asia Economy Reporter Ryu Tae-min] Major European automobile companies Fiat Chrysler (FCA) and PSA Group have received merger approval from the European Union (EU) after more than a year. The approval is understood to have been granted after addressing the EU's concerns about a monopoly in the small commercial vehicle market. The merger of the two companies alone will create a massive automobile group ranked fourth in global sales volume, which is expected to cause significant upheaval in the global automobile market.

According to major foreign media including Bloomberg on the 21st (local time), the EU Commission announced the approval of the merger between FCA and PSA Group. As a result, if the merger is finally approved at each company's extraordinary shareholders' meeting scheduled for January 4 next year, the two companies are expected to be reborn as one giant automobile group. Combining the vehicle sales volume of both companies last year amounts to 7.91 million units, ranking fourth in the world after Volkswagen (10.97 million units), Toyota (10.74 million units), and the Renault-Nissan alliance (10.16 million units).

Previously, the EU Commission had delayed approval of the merger due to concerns that the two companies would hold a monopoly position in the small commercial vehicle market within the European Economic Area (EEA). The two companies produced 755,000 light commercial vehicles last year, including those produced by Sevel, a joint venture established by the two companies, accounting for 34% of Europe's light commercial vehicle production during the same period.

PSA proposed to the EU Commission to alleviate these monopoly concerns by increasing the production share of Toyota light trucks at Sevel, a competitor. Additionally, they agreed to open their repair facilities located in France and Spain to other competitors. PSA has been contract manufacturing Toyota vans at the Sevel Nord plant in northern France since 2012.

After the merger, the merged entity of FCA and PSA will be renamed 'Stellantis,' as revealed through the logo unveiled in September. However, individual vehicle brands such as Chrysler, Fiat, Jeep, and Peugeot will be maintained. The shareholding ratio between the two companies will be 50 to 50, with PSA's Carlos Tavares serving as CEO and FCA chairman John Elkann as chairman of the board, forming a joint board of directors. The companies plan to continue operating their current factories without any closures due to plant consolidations. The headquarters of the merged entity will be established in the Netherlands.

In a joint statement on the day, the two companies expressed that they "warmly welcome" the EU Commission's approval. They expect to generate synergy effects exceeding 5 billion euros (approximately 7 trillion won) annually after the merger.

This content was produced with the assistance of AI translation services.