FCA (FIAT-Chrysler) and Groupe PSA (Peugeot-Citroen) are about to receive approval from EU authorities for a $38 billion deal.
FCA and PSA signed a merger agreement in December 2019. Since then, they have been moving towards unification with varying degrees of success. Along the way, they ran into two problems: the pandemic, which brought a crisis to the automotive industry, and the need to get permission for the deal from the European Commission.
After the merger with a 50:50 share distribution, such diverse brands as Fiat, Jeep, Dodge, RAM and Maserati, Peugeot, Opel and DS will be under one roof.
To allay the EU's antitrust concerns, PSA even went for a trick: it suggested that Toyota strengthen its position in the light commercial vehicle market. As a result, the Japanese company will receive Toyota ProAce vans based on the Peugeot Expert and Citroen Jumpy, in fact, at cost. This will increase the production of Toyotas at the plant, which will dilute PSA's share in the light commercial vehicle niche and, therefore, exclude a possible violation of antitrust laws.
PSA and Toyota have been co-producing at the Lieu Saint-Amant plant since 2012.
PSA and FCA also said that they expect significant cost savings when setting up the new facility. Thus, 40% of the savings will come from the costs associated with the release of the products themselves, 40% for procurement and 20% for other areas such as marketing, IT and logistics.
According to Reuters, FCA and PSA hope to complete the merger in the first quarter of 2021. The European Commission will announce its decision on this deal by February 2.
Fiat and PSA aim to get EU approval for $38bn merger by February
