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Fiat Chrysler Automobiles Proposes Merger with Groupe Renault

Fiat Chrysler Automobiles Proposes Merger with Groupe Renault

Snapshot: Both the companies envisage benefiting through each other's expertise in several areas such as electrification, connectivity and autonomous driving, etc.

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  • The merged entity will bring Fiat & Renault’s subsidiaries under one umbrella.
  • The proposal also suggests forming an association with Renault’s alliance partners, Mitsubishi and Nissan.
  • The merged entity is estimated to become the third largest manufacturer globally.

 

Fiat Chrysler Automobiles (FCA) is eyeing an official merger with Renault, reports in media suggest. An official proposal has been sent to the Board of Groupe Renault in the form of a non-binding letter regarding 50:50 merger between the two companies. FCA has confirmed the formal proposal has been made after a thorough discussion between the car giants on their collaboration. Both the companies look at benefitting in areas concerning product development, platform & powertrain sharing, connectivity, electrification and autonomous driving.

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As mentioned above, FCA has proposed a 50:50 merger with Renault, implying, 50 per cent of the merged entity will be owned by FCA shareholders and 50 per cent by Groupe Renault shareholders. This is estimated to make the merged FCA, Renault entity the third largest manufacturer in the world with close to 8.7 million unit annual sales. Interestingly, the merger would bring all of Fiat and Renault’s subsidiaries including Fiat, Renault, Jeep, Ram, Dacia, Lada, Alfa Romeo and Maserati brands under the same roof.

FCA-has-proposed-a-50-50-merger-with-Renault-and-its-alliance-partners

FCA’s proposal suggests an association with Renault’s alliance partners, Mitsubishi and Nissan as well, making it one of the largest manufacturer alliance with over 15 million unit annual sales. Both, FCA and Renault envisage benefitting from this symbioses with Renault sharing its expertise in EV tech and FCA providing help in autonomous tech.

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The FCA proposal also mentions about efficient capital investment, however, there will be no plant closures. As of FCA’s presence in India, it retails vehicles under two brands in the country including Fiat and Jeep. The company has a manufacturing unit in Ranjangaon, Maharashtra. Renault and Nissan, on the other hand, produces vehicles at Orgadam facility, in Tamil Nadu. The merger is currently under review by the Groupe Renault Board of Directors and more details will be revealed soon.

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