Commission approves Daimler, BMW mobility merger

The deal however is subject to conditions

Photo: EPA

BMW and Daimler’s plans to tie up car-sharing and on-demand car services has been given the green light by the European Commission on Wednesday, paving the way for consolidation in the budding and highly competitive alternative mobility market.

More precisely, the EU executive has approved the establishment of six joint ventures (JVs), bringing together the two companies' mobility services in five business fields: free-floating car sharing services, via DriveNow and Car2Go, as well as ride hailing, parking, charging, and other on-demand mobility services. The sixth joint venture will manage the brands and license them out to the other five joint ventures.

The EU regulators had raised concerns around the overlap and combined market share of the two companies’ respective car clubs, BMW’s DriveNow and Daimler’s Car2Go. What the Commission wanted, was to ensure that the merger would not create an unbreakable monopoly, and that that third-party “integrator apps” – which aggregate services for access through a single platform – would maintain access to the JVs' services. Daimler already operates integrator app Moovel, which it is starting to grow into a “marketplace” for multi-modal transport. 

And because the Commission found that the proposed transaction would raise competition concerns for car sharing in six cities, namely Berlin, Cologne, Düsseldorf, Hamburg, Munich and Vienna, as conditions for full approval, the EU executive directed Daimler and BMW to pay a  remedy package in the six cities. The companies should also allow integrator apps to display Car2Go and DriveNow vehicles, and to open up Moovel to present and future car-sharing rivals.

The approval of the merger is set to boost year-end earnings at the two companies, at a time when sales slowdowns in China, trade wars and more cumbersome emission regulations have all converged to batter profit lines. Captives at both carmakers have been looking to growmobility services business as a way of offsetting lower revenues from traditional car financing and leasing lines.

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