In this file photo taken on August 21, 2017, a car dealer in Turin, Italy, shows the logos of Jeep, Fiat, Lancia and Alfa Romeo automobile company, brands of Fiat Chrysler Automobiles (FCA).Marco Bertorello / Getty Images Fiat Chrysler Automobiles proposed a merger with Renault to create the world’s third-biggest carmaker as manufacturers scramble for scale to tackle an expensive shift to electrification and autonomous driving. The transaction would be structured as a 50-50 ownership through a Dutch holding company, Fiat said Monday. Renault shareholders, including the French government, would get an implied premium of about 10 per cent. In a statement, Renault’s board said it would study what it called a “friendly” proposal. The carmakers are moving ahead without Renault’s 20-year partner, Nissan, and Mitsubishi Motors, the other member of their troubled alliance. Fiat has conditioned the merger talks on Renault agreeing not to pursue a transaction with Nissan in the short term, according to people familiar with the matter. The Japanese company would be welcome to join the merged entity later. The broad strokes of the plan would make Fiat’s founding shareholder, the Agnelli family’s holding company Exor NV, the single largest investor in the combined entity. Fiat chairman John Elkann would likely stay in the role while Renault chairman Jean-Dominique Senard would be chief executive officer, the people familiar with the proposal said. The talks come as automakers worldwide face intense pressure to spend heavily on new technologies and adapt to trends such as car-sharing. Falling sales in the world’s biggest markets – China, the U.S. and Europe – have brought fresh urgency to consolidate. Fiat and Renault expect their joint annual synergies to amount to more than 5 billion euros, coming from areas such as purchasing power. “Fiat and Renault are looking for surer footing by gaining scale, and that’s not a bad idea for mass-market carmakers,” Bankhaus Metzler analyst Juergen Pieper said. “The execution of the deal is a significant hurdle. But on paper, this proposal looks good.” The plan has political backing from the French state, which is Renault’s most powerful shareholder. Italian Deputy Premier Matteo Salvini, who initially threatened to intervene, later gave his blessing—telling Agence France Presse he trusts the deal “will safeguard every job in this country.” Together, Fiat and Renault made about 8.7 million cars last year, which would vault the pair past South Korea’s Hyundai Motor Group and Detroit’s General Motors. That’s still behind the world’s two biggest automakers, Volkswagen and Toyota Motor, who both topped 10 million vehicles last year. But if combined with output of Renault’s existing alliance with Nissan and Mitsubishi, the total would be more than 15 million vehicles a year. Fiat and Renault would have a “broad and complementary brand portfolio” covering markets from luxury to mainstream, the Italian company said in its statement. Premium brands Jeep, Maserati, Alfa Romeo and Infiniti would come under a common umbrella. Fiat would give Renault access to the North American market, while gaining clout in Russia, the French carmaker’s second-biggest market with its Avtovaz
Origin: Fiat Chrysler plans merger with Renault in latest auto industry jolt