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Fiat Chrysler Automobiles has proposed merging its business with Renault that, if accepted, would create the third largest global automaker with 8.7 million in annual vehicle sales.
FCA delivered Monday a non-binding letter to Renault’s board that proposes combining the business as a 50-50 merger. FCA’s proposal illustrates the growing desire among automakers to consolidate, or form partnerships, in an environment of increasing regulatory pressure, declining sales and rising costs associated with next-generation technologies such as autonomous vehicle technology.
Proposal - Businesses - FCA - Renault - Shareholders
Under the proposal, the combined businesses would be split equally between FCA and Renault shareholders. The board would be a combined entity of 11 members, FCA said. The majority would be independent. FCa and Renault would get equal represent with four members each as well as one nominee from Nissan. The parent company would be listed on the Borsa Italiana in Milan, Euronext in Paris and the New York Stock Exchange.
French automaker Renault has an alliance with Nissan Motor. The two companies, whose relationship has become stressed in the fallout over the arrest of former Renault-Nissan Alliance CEO Carlos Ghosn and subsequent power struggle, share vehicle parts and collaborate on technology. Renault owns 43.4 percent of Nissan. Nissan owns 15 percent of Renault.
Fiat - Chrysler - US - Company - Jeep
Fiat Chrysler is best known in U.S. for the company behind the Jeep and Ram trucks. But its business is far larger. Fiat, which has a market value of $20 billion, is also one of Italy’s oldest companies and owns brands like Alfa Romeo, Fiat, Lancia, and Maserati.
Fiat acquired a stake in Chrysler in 2009. The FCA people know today — which employs nearly 200,000 people — was created when the companies merged in 2014.
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