Fiat-Chrysler puts up merger offer to Renault Group

Fiat Chrysler Automobiles (FCA) has proposed a merger with the Renault Group. As part of the proposal, each of the companies would own 50% shares of the combined business.

As part of the merger plan, a new Dutch parent company will be formed and both - FCA and Renault will receive equal equity stake. There will be 11 board members with 4 each from the French and Italian carmakers, one from Nissan and the rest will be independent members. The parent company would be listed at the Milan, Paris and New York stock exchanges. Before the deal is closed, to maintain equality across different markets, FCA shareholders would get Euro 2.5 billion as a dividend and distribution of Comau’s shares to FCA or an incremental Euro 250 million dividend. Comau is a subsidiary of FCA, specialising in processes and automated systems that improve corporate manufacturing production.

The combined entity would result in the third largest carmaker with annual sales of 8.7 million vehicles. It is also expected that the merger would result in capital-efficient investments in global platforms, architectures, powertrains and technologies. FCA has estimated that purchasing savings, R&D efficiencies and manufacturing and tooling efficiencies would bring about 90% of the annually predicted Euro 5 billion synergies.