In a statement issued by the European Commission today it said that it "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."

The European Commission noted in its deliberations that: "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," continued the European Commission's verdict of its decision. "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 statement concluded that: "The Commission has therefore concluded that the transaction would not raise competition concerns."

Penske originally bought a 51 per cent stake in VM Motori in 2003 from DaimlerChrysler, before completing the purchase of the remaining 49 per cent in 2007. Subsequently that same year, it sold half of the company to General Motors. Russia’s GAZ Group announced plans to purchase Penske’s remaining stake in September 2008, as a complement to their purchase of Britain’s LDV. The intention was to install VM engines in their own GAZelle van and LDV’s Maxus – but the deal fell over in February 2009, a combination of the effects of the global financial crisis and LDV’s abortive relaunch.

VM already has long-standing links with both Fiat and Chrysler, having supplied four-cylinder engines for a variety of Chryslers, Jeeps and Dodges since 1992, as well as to Alfa Romeo both before and after its takeover by Fiat in 1986. It currently furnishes Jeep with its twin-cam, 16-valve RA 428 for use in its Wrangler and Cherokee models, as well as European versions of Chrysler’s Voyager. However, owing to Chrysler’s alliance with Fiat, it is expected that when these models are refreshed, this engine will be replaced with Fiat’s own 2.0 MultiJet.

Consequently, VM has turned its focus towards the RA 630 3.0 V6, which will find its first OEM installations in European versions of the new Jeep Grand Cherokee and the Chrysler 300, which will wear a Lancia badge in Europe. It is not Fiat’s first encounter with the 630 – prototypes of the Alfa 159 with this engine were tested some years ago, but the car’s failure to set the sales charts alight led to management questioning whether such an installation would prove profitable. In the new 300 and Grand Cherokee, it will serve as a replacement for Mercedes-Benz’s OM642 3.0 V6, the diesel option for the previous 300 and Grand Cherokee – a carryover from the Chrysler Group’s time under Daimler ownership.