Fiat Chrysler proposes 50-50 merger with Renault

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  • Plant & Equipment

Merger would create world's third-largest automaker behind Volkswagen and Toyota

Fiat

Fiat Chrysler Automobiles (FCA) has offered French automaker Renault an opportunity to join forces in a 50-50 partnership.

The merged company would produce 8.7 million vehicles annually and save €5 billion (A$8 billion) each year by sharing research, purchasing and other activities, Fiat Chrysler says in a statement.

If the deal goes through, the joint organisation would create the world's third-largest automaker behind Volkswagen and Toyota.

The merger aims to provide both automakers an opportunity to lead in the development of electric and autonomous vehicles, premium brands, SUVs, pickup trucks and light commercial vehicles, and would have a broader and more balanced global presence than either company on a standalone basis, FCA says.

The combined business would be owned 50-50 between shareholders of Fiat Chrysler and Groupe Renault, while a board of governors would hold a majority of independent directors.

Shares of Fiat Chrysler and Renault jumped 13 per cent and 11.5 per cent respectively yesterday following reports of a potential merger.

There would be no plant closures as a result of the merger, Fiat Chrysler says.

Renault is already a member of the world's biggest automotive alliance with Japanese automakers Nissan and Mitsubishi Motors, known as the Renault Nissan Alliance.

The French auto manufacturer owns a 43.5 per cent stake in Nissan, while Nissan holds 15 per cent of Renault.

The potential merger will require approval by the boards of both automakers.

 

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