Fiat Chrysler Automobiles (FCA) has submitted a proposal for a merger with the Renault Group that would create the third largest automobile manufacturer in the world. According to the proposal, the newly formed group would be co-owned by FCA and Renault shareholders at a 50-50 split and feature a balanced number of seats on the Board of Directors.
Fiat Chrysler, the group behind popular brands such as Jeep, Dodge, Ram and Alfa Romeo, was the seventh largest automobile group in the world last year, selling 4.8 million vehicles in total. Adding Renault’s 3.88 million cars sold in 2018 to that total would create the third largest player in the industry led by Volkswagen and Toyota.
According to FCA’s proposal, the merger could result in synergies of more than €5 billion annually, not predicating on plant closures. “Combining the businesses will bring together complementary strengths”, the proposal reads, referring to geographic and segment coverage as well as to FCA’s capabilities in autonomous driving and Renault’s expertise with respect to electric vehicles. Renault’s Board of Directors is scheduled to discuss the proposal on Monday, after which the company will issue a press release. Shareholders reacted positively to the news, with both companies’ shares up more than 10 percent in European trading on Monday.