June 6, 2019: In an official statement released today, the Board of Fiat Chrysler Automobiles has resolved to withdraw with immediate effect from its merger proposal with Groupe Renault.
The statement reads:
FCA remains firmly convinced of the compelling, transformational rationale of a proposal that has been widely appreciated since it was submitted, the structure and terms of which were carefully balanced to deliver substantial benefits to all parties.
However it has become clear that the political conditions in France do not currently exist for such a combination to proceed successfully.
FCA expresses its sincere thanks to Groupe Renault, in particular to its Chairman and its Chief Executive Officer, and also to the Alliance partners at Nissan Motor Company and Mitsubishi Motors Corporation, for their constructive engagement on all aspects of FCA’s proposal.
FCA will continue to deliver on its commitments through the implementation of its independent strategy.
May 28, 2019: IN a move that would create the third largest automotive group in the world, Fiat Chrysler Automobiles (FCA) yesterday proposed a 50/50 merger with Groupe Renault, and collaboration with its alliance partners Nissan and Mitsubishi.
In response, Renault’s Board of Directors met today to examine the proposal it received from FCA (Fiat Chrysler Automobiles) regarding a potential merger, said to be valued at more than $50 billion, between the two automotive giants.
“After careful review of the terms of FCA’s friendly proposal, the Board of Directors [has] decided to study with interest the opportunity of such a business combination, comforting Groupe Renault’s manufacturing footprint and creating additional value for the Alliance,” a statement from Renault reads.
According to a prepared statement, released by FCA yesterday, the proposal follows initial discussions between the two companies to identify products and regions where they could collaborate, and reads:
The case for combining the businesses is also strengthened by the need to take bold decisions to capture at scale the opportunities created by the transformation of the auto industry in areas like connectivity, electrification and autonomous driving.
The combined business would sell approximately 8.7 million vehicles annually, would be a world leader in EV technologies, premium brands, SUVs, pickup trucks and light commercial vehicles and would have a broader and more balanced global presence.
The benefits of the proposed transaction are not predicated on plant closures, but would be achieved through more capital efficient investment in common global vehicle platforms, architectures, power trains and technologies.
Under the terms of the proposal, shareholders in each company would receive an equivalent equity stake in the combined company. The combination would be carried out as a merger transaction under a Dutch parent company.
The Board of the combined entity would initially be composed of 11 members, with the majority being independent and with equal representation of four members each for both FCA and Groupe Renault, as well as one nominee from Nissan.
The new parent company would be listed on the Borsa Italiana (Milan), Euronext (Paris) and the New York Stock Exchange. Benefits flowing equally to current FCA and Groupe Renault shareholders.
The combined entity, if it were to include Renault’s Nissan and Mitsubishi alliance, would have a potential global sales footprint of more than 15 million vehicles.
FCA and Groupe Renault have advised they will keep the market informed of any progress in the potential merger.