Fiat Chrysler Automobiles (FCA) and French rival Peugeot (PSA) gained EU antitrust approval on Monday for their $38 billion merger after pledging to boost Japanese rival Toyota Motor.
The two carmakers are hoping the deal, which will create the world's fourth-biggest carmaker, Stellantis, will help them tackle the industry's dual challenges of funding cleaner vehicles and the global pandemic.
The European Commission said PSA will extend its small van agreement with Toyota Motor by increasing capacity for Toyota and cutting transfer prices for the vehicles, spare parts, and accessories to address EU competition concerns.
"Access to a competitive market for small commercial vans is important for many self-employed and small and medium companies throughout Europe," European Competition Commissioner Margrethe Vestager said in a statement.
FCA and PSA will also allow rivals to access their repair and maintenance networks for vans to help new entrants expand in the market, the EU competition enforcer said. It opened an investigation in June.
FCA and PSA announced their intention to merge in late 2019, after FCA and Renault abandoned a tie-up amid a scandal around former Renault-Nissan-Mitsubishi chairman Carlos Ghosn.
The merged entity, which will be called Stellantis, would own brands such as Fiat, Jeep, Dodge, Ram, and Maserati as well as Peugeot, Opel, and DS. The combined company would have combined revenue of 170 billion euros ($189 billion), PSA said in December 2019.
"FCA and Groupe PSA warmly welcome the European Commission's clearance authorizing the merger and the creation of Stellantis, a world leader in new mobility," the companies said, adding that the shareholders of both companies will meet separately on January 4 to approve the transaction.
"The closing of the merger is expected to occur by the end of the first quarter of 2021."
FCA's controlling shareholder is Exor, the holding company of Italy's Agnelli family, while PSA's investors are the Peugeot family, the French government, and China's Dongfeng.
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