EU regulators to investigate 20.7 million euro Spanish aid for Peugeot

BRUSSELS (Reuters) - EU antitrust regulators opened an investigation on Monday into Spain's plan to grant 20.7 million euros (18.5 million pounds) to French carmaker Peugeot's <PEUP.PA> plant in the north west of the country, concerned that this may breach the bloc's state aid rules.

Peugeot is investing about 500 million euros in new production lines for vehicles in the factory located in Vigo and also in improving the process.

The European Commission said the Spanish aid may have given the country an unfair advantage in attracting the Peugeot project or that it may even be unnecessary.

(Reporting by Foo Yun Chee; Editing by Alissa de Carbonnel)