Fiat Chrysler presents plan for merger with Renault
(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.