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Home / Business / Fiat Chrysler proposes merger with Renault to create a powerhouse for the automotive industry

Fiat Chrysler proposes merger with Renault to create a powerhouse for the automotive industry



The French carmaker said on Monday that it would "examine with interest" a proposal by Fiat Chrysler that would give its shareholders 50% of the shares in a combined company with an annual vehicle sales of 8.7 million euros.

With the merger, the world's third largest automaker would emerge after Volkswagen ( VLKAF ) and Toyota ( TM ] . General Motors ( GM ) would fall in fourth place in the global ranking.
Renault ( RNLSY ) [19459005SharesfluctuationsAmundayParismorethan1
5%whileFiatChrysler'ssharesinMilanumrose11%
Companies had discussed ways to collaborate on products and new technologies, but Fiat Chrysler said in a statement in which his proposal It was outlined that more is possible to be gained from a merger.

"These discussions have made it clear that a broader collaboration through a combination would significantly improve capital efficiency and speed of product development," said the Italian-American company.

Fiat Chrysler owns brands including Jeep, Dodge, Alfa Romeo and Maserati. One of the most important markets is North America, where Renault has no significant presence.

The proposal is the latest example of established automakers looking for partnerships to share the costs of developing new technologies, including electric vehicles and autonomous propulsion systems.

German automakers BMW ( BMWYY ) and Daimler ( DDAIF ) have become a joint venture which will develop ride-sharing and charging services. Ford [194559003] F and Volkswagen work together to develop some new vehicles.
The trend toward collaboration has accelerated in recent months, as automakers became more under pressure from electric car newcomers such as Tesla ( TSLA ) and technology companies such as stood. About ( About )

Fiat Chrysler said a merger with Renault would lead to annual cost savings of more than 5 billion euros. The company announced that due to a merger no plants would be closed.

  Nissan reaches low point as Renault pushes for merger

Renault is already a member of the world's largest automotive alliance with Japanese automakers Nissan ( NSANF ) and Mitsubishi Motors.
It is unclear how a merger with Fiat Chrysler would affect this alliance, which rallied following the arrest of its former leader Carlos Ghosn last year.

Renault holds 43.5% of Nissan, while Nissan owns 15% of Renault. The French automaker, which sells fewer cars than its Japanese counterpart, had urged it to merge the companies, but was rejected.

While the relationship between Nissan and Renault was strained after Ghosn's arrest, Fiat Chrysler would increase the Alliance's annual rate of vehicle sales to 15 million.

Renault and Fiat Chrysler both said on Monday that a merger would benefit the alliance. Nissan declined to comment. Representatives of Mitsubishi Motors were not immediately available.

Regulators are likely to question a deal between Fiat Chrysler and Renault. The French government, which owns 15% of Renault, announced Monday that it would support a merger.

"We have large companies built outside of Europe, and today we need large companies built within Europe." Sibeth Ndiaye, a spokeswoman for the French government, reported to BFMTV.

Sherisse Pham and Saskya Vandoorne contributed to the coverage.


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