Fiat Chrysler Proposes Renault Merger In Auto Industry Shake-Up

Rishi Iyengar of CNN Business wrote:New Delhi (CNN Business)  Renault is considering a merger with Fiat Chrysler, a deal that would reshape the global auto industry and help the carmakers compete in the race for electric and self-driving vehicles.

The French automaker said Monday that it would "study with interest" a proposal from Fiat Chrysler that would give its shareholders 50% ownership of a combined business with annual vehicle sales of 8.7 million.

If completed, the merger would create the world's third largest carmaker behind Volkswagen (VLKAF) and Toyota (TM). General Motors (GM) would fall to fourth in the global rankings.

Renault (RNLSY) stock surged more than 15% in Paris on Monday, while Fiat Chrysler shares jumped around 11% in Milan.

The companies had been discussing ways to cooperate on products and new technologies, but Fiat Chrysler said in a statement outlining its proposal that more could be gained from a merger.

"These discussions made clear that broader collaboration through a combination would substantially improve capital efficiency and the speed of product development," the Italian-American company said.

Fiat Chrysler owns brands including Jeep, Dodge, Alfa Romeo and Maserati. Among its top markets is North America, where Renault does not have a significant presence.
The proposal is the latest example of established automakers seeking partnerships to share the costs of developing new technologies including electric vehicles and autonomous driving systems.

https://www.cnn.com/2019/05/27/business/fiat-chrysler-renault-merger/index.html