August 23, 2019
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Renault confirms it has received a merger proposal from Fiat Chrysler

Paris, May 27 (efe-epa).- The Renault car manufacturing group confirmed on Monday that it had received a proposal from Fiat Chrysler Automobiles to negotiate a possible 50 percent merger of both companies in a deal that would transform the global carmaking industry.

The French manufacturer said in a statement that its Board of Directors was scheduled to meet to discuss the proposal, after which they would issue a press release.

"Groupe Renault confirms that it received a proposal from FCA (Fiat Chrysler Automobiles) regarding a potential 50/50 merger transaction between Groupe Renault and FCA," Renault said. "Renault’s Board of Directors will meet this morning to discuss this proposal."

The possible merger had been announced Sunday by French media, which said there was a willingness to build a group similar to an "Airbus of the automobile industry," a European giant that would collaborate closely with Nissan and Mitsubishi, who are Renault's Japanese partners.

The group would produce about 15 million vehicles a year, including brands such as Renault, Fiat and Nissan but also Alfa-Romeo, Mitsubishi, Dacia, Chrysler, Jeep and RAM, among others, positioning itself as the first player in several markets.

The president of the firm, Jean-Dominique Senard, presented the project to the French Minister of Economy, Bruno Le Maire, on Friday.

Neither the Ministry nor the Presidency would oppose in principle this operation that would allow the creation of a much more powerful European group.

However, the economic press points out that the Agnelli family, owner of the FCA group, would have to pay an extraordinary dividend to its shareholders in advance to equalize the capital stock of both groups since its current value is 18 billion euros compared to the 15 billion million Renault.

In this context, Agnelli would become the first shareholder of the group if the merger is confirmed as they control 29 percent of FCA against the French state that controls 15 percent of Renault.

Renault's Japanese partner, Nissan, has not been included in the negotiations to date, although in the long term its involvement would be indispensable.

"Groupe Renault has manufactured cars since 1898," the company said in a statement. "Today it is an international multi-brand group, selling close to 3.9 million vehicles in 134 countries in 2018, with 36 manufacturing sites, 12,700 points of sales and employing more than 180,000 people.EFE

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