Fiat Chrysler and Renault are set for merger to form global giant

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The transaction will be structured as a 50-50 ownership through a Dutch holding company and will not entail plant closures

A Fiat Chrysler Automobiles sign at the headquarters in Auburn Hills, Michigan, the US. Picture: REUTERS/REBECCA COOK

The transaction will be structured as a 50-50 ownership through a Dutch holding company, Fiat said on Monday, adding that it has an implied premium of about 10% for Renault investors and will not entail plant closures. Exor, the investing arm of Fiat’s founding Agnelli family, is set to become the largest single investor in the combined entity.The talks come as carmakers worldwide face intense pressure to spend heavily on new technologies and adapt to trends such as car-sharing.

Together, the two companies made about 8.7-million cars in 2018, which would vault the pair past South Korea’s Hyundai Motor Group and Detroit’s General Motors. That’s still behind the world’s two biggest carmakers, Volkswagen and Toyota Motor, who both topped 10-million vehicles in 2018. Renault’s existing alliance, including numbers from partners Nissan and Mitsubishi, also reached this milestone.

Fiat and Renault would have a “broad and complementary brand portfolio” covering markets from luxury to mainstream, the Italian company said.

 

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