Exclusive: Fiat Chrysler to propose merger with Renault - Nikkei Asian Review

FRANKFURT/PARIS -- Fiat Chrysler Automobiles this week is set to propose a merger with Renault, Nikkei learned on Sunday.

Fiat Chrysler Automobiles, or FCA, is expected to propose the start of discussions for a merger within a couple of days, several sources familiar with the matter told Nikkei.

FCA's global car sales last year totaled 4.84 million vehicles. A merger with Renault would bring the combined sales of the two companies to 8.72 million, surpassing General Motors of the U.S., which sold 8.38 million cars last year and ranked fourth in global vehicle sales.

FCA intends to keep Renault's alliance with Nissan Motor and Mitsubishi Motors as it is.

If FCA joins the Renault-Nissan-Mitsubishi Alliance, annual sales would top 15 million vehicles, significantly surpassing that of Germany's Volkswagen Group, which ranked No. 1 in global car sales last year, with 10.83 million.

Unlike the Renault-Nissan-Mitsubishi Alliance, which lacks strength in luxury cars, FCA holds several high-end brands, including Maserati and Alfa Romeo.

FCA's earnings are mostly dependent on its sales in North America. A merger with Renault, which gets most of its earnings from the European market, would supplement each other's weaknesses. A merger would also benefit both carmakers in terms of production and investment in new areas, such as AI and electric vehicles.

FCA has sought to streamline its business by scaling up. Sergio Marchionne, the late chief executive of FCA, previously proposed an integration with General Motors. In March, Groupe PSA of France reportedly proposed a merger with FCA.

Michael Manley, who became FCA's CEO in July 2018 following Marchionne's death at age 66, is also considered to be open to possible merger or integration with other automakers.

"We are expecting various opportunities in a couple of years," Manley said on May 3 in an earnings briefing call. "FCA will take an aggressive move."

Renault proposed to Nissan to restart talks on a merger in April and is also expected to put more pressure on Nissan to review their capital ties after Nissan's general shareholders meeting in June. An FCA-Renault merger would most likely affect discussions between Nissan and Renault.

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https://asia.nikkei.com/Business/Exclusive-Fiat-Chrysler-to-propose-merger-with-Renault

2019-05-26 12:37:00Z
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