World News – CA – Fiat, PSA to seek EU approval for $ 38 billion merger: sources

BRUSSELS / MILAN (Reuters) – Fiat Chrysler and PSA are set to get EU approval for their $ 38 billion merger to create the Global No4 automaker, have people familiar with the matter said as they work to tackle the twin challenges of the cleaner vehicle finance industry and the global pandemic

The green light from the European Commission would formalize the creation of Stellantis, a group of automakers that could make big profits from selling Ram pickups and Jeep SUVs to US drivers to fund expensive development of zero-emission vehicles at sell in Europe and China

The all-stock merger announced late last year would unite brands like Fiat, Jeep, Dodge, Ram and Maserati with brands like Peugeot, Opel and DS – while targeting annual cost cuts of 5 billion euros (6 billion dollars) without closing factories

Commission and Italian-American group Fiat Chrysler Automobiles (FCA) declined to comment France’s PSA did not immediately respond to a request for comment

PSA and FCA shares reversed losses after Reuters article was published PSA stock was last up 34% at 17 € 06, while FCA shares were 3% higher at 1,143 euros

To allay EU antitrust concerns, PSA has offered to bolster its Japanese rival Toyota Motor Corp, with which it has a minivan joint venture, by ramping up production and selling vans at a price close to the cost of returns, sources said

Following feedback from competitors and customers, automakers only had to tweak the wording of their dealerships, without changing the substance, people said.

Companies did not have to use the COVID-19 pandemic to advocate for the merger, they said, adding that the EU decision could come by the end of the year, before the official February 2 deadline

FCA and PSA have said they hope to complete the merger in the first quarter of 2021

Last month, FCA and PSA restructured the terms of their agreement to save money and increase their targeted cost savings due to the economic fallout from the health crisis

Companies said about 40% of savings will come from product spending, 40% from purchasing and 20% from other areas, such as marketing, IT and logistics

Reporting by Foo Yun Chee in Brussels and Giulio Piovaccari in Milan, additional reporting by Gilles Guillaume in Paris, written by Nick Carey; edited by Jason Neely and Mark Potter

All quotes were delayed by at least 15 minutes See here for a full list of exchanges and delays

Fiat Chrysler Automobiles, Groupe PSA, European Union, Mergers and Acquisitions, Peugeot, Automotive Industry