As expected, the Italian-American car manufacturer Fiat Chrysler (FCA) Monday presented a merger project with its French counterpart Renault, to build the third global group in the sector. According to the proposal made by FCA to Renault, the new group would be held 50% by the shareholders of the Italian-American manufacturer and 50% by those of Renault. It would be listed in Paris, New York and Milan, Fiat Chrysler said in a statement.
Renault meeting Monday morning
The board of directors of Renault meets Monday morning to study this offer, announced shortly after the French group, stating that "a press release would be broadcast" then. A source close to the file said that no decision was expected today: "It will take days, even weeks." The board of directors must simply decide on Monday whether it is studying the proposal.
The French government is "in favor" of this alliance, but "it is necessary that the conditions in which this fusion is carried out be at the same time favorable to the economic development of Renault and obviously to the employees of Renault", affirmed the spokesman of the government , Sibeth Ndiaye. Nevertheless, the CGT demands that the French state "keep a blocking minority".
Towards the third "original equipment manufacturer"
Fiat Chrysler stresses that this merger would give birth to the third "original equipment manufacturer" (OEM), with annual sales of 8.7 million vehicles and a "strong presence in key regions and segments". The brand portfolio of the two groups is "broad and complementary, and would provide full coverage of the market, from luxury to the consumer segment," he noted. The new company "would become a world leader in a rapidly evolving automotive sector with a strong positioning in new technologies, including electric and autonomous vehicles," added the manufacturer.
FCA and Renault, who both make popular cars, would have the opportunity to share many technical elements. Renault would bring its know-how in electric vehicles, an area in which the Italian-American group is late. Fiat Chrysler would bring him a significant market share in North America, with large vehicles SUV and pickup particularly profitable, which are not the strong point of Renault.
Discussions that had already begun under Carlos Ghosn
FCA has also ensured that the merger would not result in any closure of production sites, evoking, on the other hand, annual synergies of more than € 5 billion, which will be added to those already existing under the Renault- Nissan-Mitsubishi.
According to a source familiar with the matter, this announcement is the culmination of "discussions that had already begun under Carlos Ghosn", the former boss emblematic of the French manufacturer, indicted in Japan for financial malfeasance. His arrest in late November in Tokyo opened a crisis between Renault and its Japanese ally Nissan (which controls Mitsubishi Motors), behind the revelations that triggered the investigation.
A source close to the dossier believes that "this project leaves the door open to Nissan" to be part of this rapprochement. The latter, counting Nissan and Mitsubishi, would create a set of nearly 16 million vehicles, ahead of the German juggernaut Volkswagen (10.6 million euros) and Toyota (10.59 million). A Franco-Italian-American alliance would also profoundly change the balance of power within the Renault-Nissan-Mitsubishi team, strengthening the French side.
Government is "in favor" of this merger project
Government spokeswoman Sibeth Ndiaye announced Monday that "the government is in favor" of the merger project. "The government is in favor" but "it is necessary that the conditions under which this merger is made are both favorable to the economic development of Renault and of course to the employees of Renault," said Sibeth Ndiaye on RMC and BFMTV.