PSA plans to ramp up production of Toyota vehicles to complete merger with FCASeptember 28, 2020
PSA wants to increase Toyota’s production capacity to defuse European Union antitrust concerns over the planned merger with Fiat Chrysler Automobiles (FCA).
The French automaker is currently producing Toyota ProAce, Peugeot Expert and Citroen Jumpy vans at its Sevelnord plant in northern France, and has also committed to increasing vehicle production at the facility.
According to insider information, the company will sell these vans at a price close to cost. On Friday, PSA submitted a proposal to the European Commission. The move comes three months after the EU launched an investigation into the PSA-FCA merger over concerns that it could hurt competition in the small van market in 14 EU countries and the UK.
“At the moment, the deal has received permission to merge in fourteen jurisdictions. As stated earlier, the transaction is expected to close in the first quarter of 2021, ”PSA and FCA said in a joint statement.
The European Commission suspended its investigation into the deal in July, while waiting for the companies to provide the requested details. At the moment, there is no deadline for when the merger will be approved or not.
“The term is still suspended. This procedure is activated in the investigation of mergers if the parties are unable to timely provide important information that the Commission has requested from them, ”the Commission said.
The news came just days after PSA Group announced that it had begun to buy back shares from Chinese partner Dongfeng. According to the French group, it recently bought back 10 million shares for 163.85 million euros, which is roughly 1.1 percent of the automaker’s equity.
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