Fiat Chrysler wants to merge with Renault

Fiat Chrysler proposed on Monday to merge with France’s Renault to create the world’s third-biggest automaker, worth $40 billion, and combine forces in the race to make electric and autonomous vehicles.

The merged company would reshape the global industry: it would produce some 8.7 million vehicles a year, leapfrogging General Motors and trailing only Volkswagen and Toyota.

Shares of both companies jumped on the news of the offer, which would see each side’s shareholders split ownership in the new manufacturer.

Renault welcomed what it called a “friendly” offer. The company’s board met Monday at its headquarters outside Paris and said afterward that Renault will study the proposal “with interest.” In a statement, Renault said such a fusion could “improve Renault’s industrial footprint and be a generator of additional value for the Alliance” with Japan’s Nissan and Mitsubishi.