Brussels, 30 March 2011
Mergers: Commission clears acquisition of a stake in Italian engine manufacturer VM Motori by Fiat
The European Commission has cleared under the EU Merger Regulation the acquisition of joint control over the Italian diesel engine manufacturer VM Motori S.p.A. by Fiat S.p.A. and General Motors Company of the US. After examining the operation, the Commission concluded that the transaction would not significantly impede effective competition in the European Economic Area (EEA) or any substantial part of it.
VM Motori designs and manufactures a range of diesel engines for automotive, industrial, agricultural, stationary and marine use. It is currently jointly controlled by GM and the US-based Penske Corporation (see M.4832).
General Motors (GM) is one of the world's largest car manufacturers with a portfolio of brands including Buick, Cadillac, Chevrolet and Opel (which trades under the Vauxhall badge in the UK).
Fiat S.p.A. (Fiat) is the parent company of a number of companies active in the manufacture of cars (Fiat Group Automobiles, Maserati and Ferrari), car components (Fiat Powertrain, Magneti Marelli, Teksid) and production systems (Comau). Fiat Group Automobiles in turn holds a stake in the US-based car manufacturer Chrysler.
On 1 January 2011, Fiat underwent a corporate reorganisation and created a newly-incorporated company Fiat Industrial S.p.A for its activities in agricultural and construction equipment (CNH) and trucks (Iveco). Each Fiat shareholder received one share in Fiat Industrial S.p.A. for every share they held in Fiat. As a result, the shareholders of Fiat and Fiat Industrial were identical and the Commission therefore treated the two groups as a single economic entity when assessing the concentration.
The Commission’s examination of the proposed transaction showed that the combination of VM Motori's diesel engine manufacturing activities with those of Fiat, which are carried out by Fiat Powertrain, would lead to relatively limited horizontal overlaps which would not raise competition concerns.
The Commission also examined whether the vertical links arising from the proposed transaction between the diesel engine manufacturing activities of VM Motori and the existing activities of Fiat and Fiat Industrial on a number of markets for automotive components and motor vehicles would give rise to competition concerns. In all instances, the Commission's examination showed that this would not be the case as Fiat and Fiat Industrial would not be able to shut out their competitors as sufficient alternative sources of supply exist.
The Commission has therefore concluded that the transaction would not raise competition concerns.
Merger control rules and procedures
The Commission, in 1989, was given the power to assess mergers and acquisitions involving companies with a turnover above certain thresholds (see Art 1 of the Merger Regulation). The Commission clears the vast majority of mergers without conditions and only accepts remedies or prohibits mergers when the notified transaction would lead to a significant impediment to competition and make consumers worse off.
From the moment a transaction is notified, the Commission generally has a total of 25 working days to decide whether to grant approval (Phase I) or to start an in-depth investigation (Phase II).
The transaction was notified to the Commission on 22 February 2011. More information on the case is available at: