MILAN, ITALY-the Fiat Chrysler car maker (FCA) presented on Monday, 27, a proposal to merge with the French Renault, which would create the third largest group in the sector.
According to the FCA proposal, the Italian-American Automamaker would own 50% of the shares and the remainder would be owned by Renault. The stocks would have quotes on the new York and Milan stock exchanges, explained the Fiat Chrysler in a statement.
After meeting this second, the board of Directors of Renault decided to study "with interest" the proposal. "After having carefully revised the terms of this friendly proposition, the Renault Board of directors decided to study with interest the opportunity of this approximation, which reinforces the industrial brand of the Renault group and generates additional value for the Alliance , "the group said in a statement.
The company reported that it will give more information about the conversations "when the time comes to inform the market about the results", according to the corresponding laws and regulations.
According to the FCA, the merger would create the third largest automobile group in the world, with annual sales of 8.7 million vehicles and "a strong presence in regions and key segments". The merger would not provoke the closing of factories, the company said.
The actions of the two groups were high after the announcement. The FCA title recorded an 18% advance on the Milan stock Exchange, before retreating to 14.30%, to €13.094. Renault's action went up 13.65%, to €56.81.
Approval of France
The French government is favorable to the alliance, but "it is necessary that the conditions of the merger are favorable to the economic development of Renault and of course to Renault employees," said French government spokesman Sibeth Ndiaye.
Fiat Chrysler indicated that the production line of the two companies is "broad and complementary, and would give a complete coverage to the market, from the luxury segment to the large audience.
FCA and Renault produce intermediate and popular level cars, which means they could share technological advances, analysts say.
Renault could contribute its technology to the development of electric motors, while Fiat Chrysler would enter its account in the American market and its 4x4 vehicles and pickup trucks. /AFP
Companies in numbers
Value in the Stock Exchange
Renault: €17 billion
FCA: €19 billion
Total: €36 billion
Turnover
Renault: €57.4 billion in 2018
FCA: €110 billion
Total: €167.4 billion
Annual Sales Volume
Renault: 3.9 million vehicles sold at 2018
FCA: 4.8 million
Total: 8.7 million
Net income
Renault: €3.4 billion in 2018
FCA: €3.6 billion
Total: €7 billion
Operating profit
Renault: €3.6 billion in 2018
FCA: €4.1 billion
Total: €7.7 billion
Operating margin
Renault: 6.3% of turnover
FCA: 3.7%
Profit per vehicle sold
Renault: €930 per vehicle
FCA: €848 per vehicle
Main brands
Renault Group: Renault, Dacia, Alpine, Lada and Samsung Motors
From FCA: Fiat, Chrysler, Alfa Romeo, Jeep, Abarth, Lancia, Maserati, Dodge and Ram
O Estado de S.Paulo - 27/05/2019
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