A major merger looks set to shake-up the global automotive industry.
Fiat Chrysler (NYSE:FCAU) proposed on Monday to merge with French carmaker Renault in a move aimed at saving billions of dollars for both companies as the industry embraces electric and autonomous vehicles.
The merged company would be the world's number-three automaker and be 50% owned by FCA shareholders and 50% by Renault shareholders, Fiat Chrysler Automobiles said in a written news release issued on Monday.
The companies have been in discussions about the merger for several weeks. Executives at Renault said it was "studying with interest" the terms of the proposed merger. It's unclear what the merger would mean for Renault's existing alliance with Japan's Nissan and Mitsubishi automakers.
The Fiat Chrysler news release said the merged company would produce 8.7 million vehicles annually and save €5 billion (Euros) for the companies each year by sharing research, purchasing and other activities. It said the deal would involve no plant closures but didn't address potential job cuts.
The Renault-Nissan-Mitsubishi alliance has been troubled since the November arrest of its boss and biggest champion, Carlos Ghosn, on financial misconduct charges in Japan. Together, the three companies are the biggest maker of passenger cars in the world.
The French government, which owns 15% of Renault, has said it is reviewing the merger proposal.
