Fiat Chrysler puts merger offer to Renault board

World
Europe

Fiat Chrysler Automobiles (FCA) has made a "transformative" merger proposal to Renault, the Italian-American carmaker said, in a deal that would create a new third-ranked global manufacturer.

The proposal, finalized in overnight talks with Renault, was being discussed at a meeting of the French group's board early on Monday.

The deal would create a carmaker selling 8.7 million vehicles annually with a strong presence across key regions, automotive markets and technologies, FCA said. It would generate five billion euros (5.6 billion U.S. dollars) in estimated annual savings.

The "broad and complementary brand portfolio would provide full market coverage, from luxury to mainstream," it added.

The Renault SA EZ-Ultimo concept electric vehicle stands on display at the Auto Shanghai 2019 show in Shanghai, China, April 16, 2019. /VCG Photo

If successful, the FCA-Renault tie-up would alter the competitive landscape for rival carmakers from General Motors to Peugeot maker PSA Group, which recently held inconclusive talks with FCA.

It could also have profound repercussions for Renault's 20-year-old alliance with Nissan, already weakened by the crisis surrounding the arrest and ouster of former chairman Carlos Ghosn late last year.

The FCA-Renault plan would see the two carmakers merged under a listed Dutch holding company. After payment of a 2.5 billion-euro dividend to current FCA shareholders, each investor group would receive 50 percent of the stock in the new company.

"The case for combination is also strengthened by the need to take bold decisions to capture at scale the opportunities created by the transformation of the auto industry," FCA said.

Source(s): Reuters