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Business

European Commission approves Fiat-Chrysler tie-up

Text by NEWS WIRES

Latest update : 2009-07-24

A month after the US Supreme Court cleared the way for Italian automaker Fiat to acquire assets of the bankrupt US carmaker Chrysler, the European Commission has also given its approval. Regulators said the move wouldn't hurt competition in Europe.

AFP - EU regulators on Friday approved a tie-up between Italian automaker Fiat and US-based manufacturer Chrysler, saying the move would not hurt competition in Europe.

"After examining the operation, the (European) Commission concluded that the transaction would not significantly impede effective competition in the European Economic Area or any substantial part of it," a statement said.

Chrysler and Fiat sealed a deal last month to create a new global auto giant in a milestone for the world industry after the Italian champion stepped in to salvage the bankrupt US firm.

The move completed a quick restructuring of the number three US automaker in a plan orchestrated and backed financially by the US and Canadian governments after the world economic crisis sped up a decline in the US auto industry.

Fiat will at first hold 20 percent of Chrysler Group, with its equity stake rising to 35 percent and eventually to a majority stake as long as targets mandated by the deal are achieved and US government funds are repaid.

While it has not provided any cash for the alliance, Fiat will bring new technology to help Chrysler develop more fuel-efficient vehicles needed in the US and other markets, and will use Chrysler's sales network in exchange.

The European Commission, the EU's competition watchdog, said its "examination of the transaction showed that the horizontal overlaps between the activities of Chrysler and Fiat are limited."

"The merger would therefore not significantly change the competitive structure of the markets for the manufacture and supply of passenger cars," it said.

Date created : 2009-07-24

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