Fiat Chrysler has made a “transformative” merger proposal for French carmaker Renault, the Italian agency stated on Monday.
The mixed enterprise could be 50% owned by Fiat shareholders and 50% by Renault stockholders.
The carmaker stated the merger would create a worldwide automotive chief, with eight.7 million car gross sales.
Carmakers have confronted strain to consolidate amid main business shifts, together with in direction of electrical autos.
Shares in each corporations rose strongly following the announcement.
In an announcement, Fiat Chrysler (FCA) stated the deliberate merger would create a “world chief within the quickly altering automotive business with a powerful place in remodeling applied sciences, together with electrification and autonomous driving”.
Fiat stated that if the corporations’ 2018 monetary outcomes have been totted up, the mixed firm’s annual revenues could be practically €170bn (£149.6bn; $190.5bn), with working revenue of greater than €10bn and internet revenue of greater than €8bn.
No plant closures could be precipitated because of the tie-up, the carmaker stated.
It’ll purpose to avoid wasting €5bn a 12 months by sharing growth prices on expertise reminiscent of electrical autos and self-driving vehicles.
It’s thought some managerial positions could also be misplaced, however the corporations shall be eager to point out that production-line jobs are being preserved.
The brand new firm shall be based mostly within the Netherlands and shall be listed on the Milan, Paris and New York inventory exchanges.
To make the merger one in every of equals, the slightly-wealthier FCA pays a particular dividend of €2.5bn and promote its Comau robotics enterprise.
The proposal shall be thought-about by the Renault board. Who will lead the brand new entity and what it could be known as are usually not but determined.
If the plan goes forward, Nissan and the French authorities will personal about 7.5% apiece of the brand new, merged firm.
By gross sales, it is going to be quantity 4 in North America, quantity two within the area which covers Europe, the Center East and Africa and the largest in Latin America.
Business shifts towards electrical fashions, together with stricter emissions requirements and the event of recent applied sciences for autonomous autos, have put rising strain on carmakers to consolidate.
Renault already has an alliance with Japan’s Nissan, during which analysis prices and elements are shared. The businesses personal shares in one another, too. Renault owns 43.four% of Nissan’s shares and Nissan owns 15% of Renault.
The previous chief government of each Nissan and Renault, Carlos Ghosn, is awaiting trial following his fourth arrest amid allegations of monetary misconduct.
The allegations have put a pressure on the 20-year-old alliance, which additionally contains Japan’s Mitsubishi Motors.
New entrants within the motoring sector reminiscent of Tesla, in addition to cash-rich corporations creating driverless expertise reminiscent of Amazon and Google-owned Waymo, are placing strain on older and infrequently closely indebted carmakers to maintain up.