Fiat Chrysler Automobiles NV and PSA Group are headed for European Union antitrust approval for their plans to create the world’s fourth-biggest carmaker, according to people familiar with the deal.
Concessions offered by the companies to allay EU concerns about the deal received positive feedback from rivals and customers and won’t require changes, the people said on condition of anonymity because the merger approval process isn’t public. That means the European Commission will approve the deal before a Feb. 2 deadline, the people said.
Peugeot shares rose 2.4% at 10:49 a.m. in Paris trading, while Fiat shares advanced 1.7% in Milan. Fiat and Peugeot-maker PSA, with a combined market value of about 33 billion euros ($39 billion), are set to publish third-quarter figures on Wednesday when executives may comment on the deal.
The duo have escaped the risk of divesting operations with their offer to deepen an existing agreement under which PSA makes small and mid-sized utility vehicles at French and Spanish factories for Toyota Motor Corp. that will keep the plants running. Fiat and PSA plan to close their tie-up in the first quarter of 2021.
The commission opened a longer probe into the car deal in June, flagging potential worries that the deal would eliminate a provider of light commercial vehicles in Europe. The commission had highlighted the growing market for delivery vans as increasing numbers of consumers opted for online shopping.
The companies and the commission all declined to comment on the deal approval.
Antitrust regulators are often a difficult obstacle for European companies seeking to buy or combine with rivals. Fiat and PSA have also managed to steer their deal safely through a pandemic that has doomed deals such as LVMH’s takeover of Tiffany & Co. and Boeing Co.’s combination with Embraer SA’s commercial-aircraft business.
– By Aoife White, Daniele Lepido and Tara Patel (Bloomberg)
