Renault-Fiat merger could become world's 3rd largest automaker: Here's 8 things you need to know

Image: Reuters
Image: Reuters

The prospect of a merger between French automaker Renault and Italian-US auto giant Fiat Chrysler was revealed on Monday (May 27).

The 50-50 combination offered by Fiat, which sells 4.8-million vehicles a year, would create the world'sthird-biggest automaker  by adding Renault's sales of 3.8-million.

And with the sales by Renault's Japanese partners Nissan (5.6-million) and Mitsubishi (1.2-million), the group would become a globe-spanning powerhouse selling nearly 16-million cars a year - or one out of six sold worldwide.

READ: WATCH - Old partner Nissan left sidelined by Renault-Fiat merger

If the two auto groups joined they would become the 3rd largest global OEM with a potential 8.7-million in vehicle sales. Geographically, based on FCA and Groupe Renault’s 2018 global sales, the combined company would be No.4 in North America, No.5 in EMEA and No.1 in Latin America.

What are the goals for the proposed merger? FCA answers below:

1 Combined business to be 50% owned by FCA shareholders and 50% by Groupe Renault shareholders – balanced  governance structure and majority of Board of Directors being independent

2 Combination would create the 3rd largest global OEM with 8.7m vehicle sales and a strong market presence in key regions and vehicle segments

3 Broad and complementary brand portfolio would provide full market coverage, from luxury to mainstream

4 Combined  company would  be  a  world  leader  in the rapidly-changing automotive industry with a strong position in  transforming technologies, including electrification and autonomous driving

5 No factory closures as a result of the combination

6 In excess of €5-billion estimated annual run rate synergies incremental to existing Renault-Nissan-Mitsubishi Alliance synergies

7 Strong combined balance  sheet  allowing for  flexible  capital  allocation and robust dividend policy

8 Significant benefits  to the other Alliance partners including €1-billion of additional estimated run rate synergies

Read FCA's official statement below:

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