Fiat Chrysler presents plan for merger with Re­nault

Daily Mirror (Sri Lanka) - - MOTOR -

(Paris) AFP: Ital­ian-us auto gi­ant Fiat Chrysler pre­sented a merger pro­posal to France’s Re­nault on Monday, a deal that could re­shape the in­dus­try as Re­nault wres­tles with ques­tions over its global strat­egy fol­low­ing the ar­rest and ouster of its chief ex­ec­u­tive.

Fiat Chrysler de­liv­ered a non­bind­ing let­ter to Re­nault propos­ing “a com­bi­na­tion of their re­spec­tive busi­nesses as a 50/50 merger”, po­ten­tially creat­ing the world’s third­largest car­maker, it said in a state­ment.

Re­nault said its board was meet­ing at its Boulogne-bil­lan­court head­quar­ters near Paris to dis­cuss the of­fer, and would is­sue a state­ment af­ter­wards.

But a source at the com­pany said a de­ci­sion was not ex­pected by the close of the day, say­ing “It will take days, or even weeks.”

Monday’s board ses­sion would merely ex­am­ine whether or not to ex­plore the of­fer on the table, the source said.

Shares in Fiat Chrysler Au­to­mo­biles (FCA) shot up more than 18 per­cent on the news, be­fore fall­ing back to 10 per­cent in late-morn­ing trad­ing on the Milan stock ex­change.

Re­nault shares jumped more than 13 per­cent as the French govern­ment, which owns a 15 per­cent stake in the au­tomaker, ap­peared to give its bless­ing to a deal.

“The govern­ment is in favour, but the terms of this merger must be sup­port­ive of Re­nault’s eco­nomic de­vel­op­ment, and ob­vi­ously of Re­nault’s em­ploy­ees,” govern­ment spokeswoma­n Si­beth Ndi­aye said Monday.

“We have very large com­pa­nies, giants, that are be­ing cre­ated out­side of Europe, and to­day we needs giants to be cre­ated in Europe,” she told BFM tele­vi­sion, adding that Fi­nance Min­is­ter Bruno Le Maire had been in­formed of the talks by Re­nault board chair­man Jean-do­minique Se­nard last week.

France’s CGT labour union, the sec­ond-largest at Re­nault, called on the govern­ment to main­tain a block­ing mi­nor­ity af­ter any deal, which could see the state’s stake di­luted in a merger.

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