French carmaker Renault confirms to Kallanish it has received a proposal from Italian carmaker Fiat Chrysler Automobiles (FCA) regarding a potential merger transaction.
FCA has delivered a non-binding letter to the Board of Groupe Renault proposing a combination of their respective businesses as a 50/50 merger. The FCA proposal follows initial operational discussions between the two companies to identify products and geographies where they could collaborate.
The proposed combination would create a global automaker, preeminent in terms of revenue, volumes, profitability and technology, benefitting the companies’ respective shareholders and stakeholders, FCA says in a note.
The combination would create the third-largest global carmaker with 8.7 million of annual vehicle sales and a strong market presence in key regions and vehicle segments. No plant will be closed as a result of the combination, FCA reassures.
FCA estimates, based on its experience, that approximately 90% of synergies would come from purchasing savings, R&D efficiencies, and manufacturing and tooling efficiencies.
FCA operates 102 manufacturing facilities. Renault is an international multi-brand group, selling close to 3.9 million vehicles in 134 countries in 2018, with 36 manufacturing sites.
