The $38 billion merger is finally happening.
This all began over a year ago when Fiat Chrysler Automobiles and French Groupe PSA announced their plan for a $38 billion 50-50 merger. The new automaker, to be called Stellantis, will encompass many major global brands, among them Fiat, Chrysler, Dodge, Jeep, Ram, Peugeot, Citroen, and Opel. Once the final agreement is signed, Stellantis will officially become the world's fourth-largest automaker. Any merger this significant must pass several regulatory hurdles and because it's an international company doing business on multiple continents, government regulators from the EU and the US had to approve of the deal. And that's what caused the final hurdle, which has now been resolved.
Reuters reports the EU antitrust authority has approved the merger, but only after company officials pledged to assist Toyota. Regulators were concerned about Stellantis' future commercial truck business becoming a monopoly in Europe and elsewhere.
The agreement calls for PSA to extend its small van joint venture with Toyota by increasing production and then selling those vans for reduced prices. PSA and FCA must also allow their dealers to repair Toyota vans and sell parts and accessories. "Access to a competitive market for small commercial vans is important for many self-employed and small and medium companies throughout Europe," European Competition Commissioner Margrethe Vestager said in a statement.
Needless to say, FCA and Groupe PSA are thrilled by the commission's announcement and are proceeding with a plan to approve the transaction on January 4, 2021, and will sign the final agreement no later than March 31, 2021. Once Stellantis officially exists, does this mean Peugeots will immediately be sold in the US and the Jeep Wrangler everywhere in Europe?
No, at least not in the short term. FCA wants access to PSA's small and electric vehicle platforms and battery technologies, while PSA will instantly have access to the highly lucrative North American market where trucks and SUVs continue to dominate sales, two segments where FCA thrives.
Earlier this week, it was announced FCA CEO Mike Manley has been tapped to run American operations for the new automaker and will report to PSA CEO Carlos Tavares, who will become CEO of Stellantis. Manley was previously rumored to be in the running to become the new Ferrari CEO.