Fiat Chrysler Automobiles (FCA) has confirmed their proposal to Renault for a 50/50 merger, as reported earlier.
FCA’s proposal follows earlier discussions between the two car makers in order to identify products and geographies where they could partner, particularly in the development of new technologies.
Renault has responded with a statement, saying that its board has reviewed FCA’s proposal and has decided to further study “with interest the opportunity of such a business combination”.
“The combined business would sell approximately 8.7 million vehicles annually, would be a world leader in EV technologies, premium brands, SUVs, pickup trucks and light commercial vehicles and would have a broader and more balanced global presence than either company on a standalone basis”, FCA said in its announcement.
The proposed merger between the two car makers would be structured as a 50/50 ownership via a Dutch holding company, according to FCA, following a payment of $2.8 billion special dividend to FCA shareholders.
“FCA’s evolving capability in autonomous driving, which includes partnerships with Waymo, BMW and Aptiv, is complemented by Groupe Renault’s decade of experience in EV technology where it is the highest selling EV OEM in Europe.” FCA added.
If succesful, the merger would create the world’s largest automotive alliance, with more than 15 million vehicles sold annually. FCA’s US operations will not be affected according to some reports, with the car maker noting that no plant closures would result from the deal.
Fiat Chrysler and Renault have currently a combined market value of $36.5 billion (32.6 billion euros).