Will this merger ever happen?
Despite being announced months ago, the proposed $50 billion 50-50 merger between Fiat Chrysler and France's PSA Group is still not a done deal. As the world begins to emerge from lockdowns and economies start up again, the two global automakers continue to inch forward towards the finish line, only now they're facing another problem.
Reuters claims EU antitrust regulators are taking issue about what would be the world's fourth-largest automaker's high market share in the small vans segment. Although small vans, such as delivery vans, are not quite as popular in the US as they are elsewhere, such as Europe, regulators are certainly making life difficult for both companies at the moment.
FCA and PSA have exactly two days, specifically this Wednesday, to reassure the commission's doubts or to offer concessions. If they fail to do either, then the proposed deal will be delayed even longer because of a required four-month-long investigation.
Neither automaker was available to comment but the future of the merger could potentially be decided this week. The longer both sides are forced to wait, the greater potential for something further to go wrong that could unravel the deal. Add to that the global economic uncertainty these days and the pressure cooker gets turned up several notches. Neither automaker wants this proposed merger to fall through for numerous reasons.
FCA is strong in North America and Latin America while PSA is a major presence in Europe. Therefore, the proposed automaker would have a greater geographical footprint.
Also, the companies have common ground with platforms, engine families, electric vehicle platforms, autonomous technologies, and, of course, vans. Production of current and hot-selling vehicles like the Jeep Wrangler and Gladiator will remain in Toledo, Ohio, but it's entirely possible future vehicles will be manufactured outside of the US and imported.
Above all, Fiat, Jeep, Dodge, Chrysler, Ram, Maserati, Alfa Romeo, Peugeot, Opel, and Citroen will all be under a single umbrella. But unless EU regulators get the reassurances they're demanding, none of this will happen.