Renault to examine merger proposal from FCA

-Merger would make the alliance the third largest in the world after Toyota and Volkswagen

Renault’s Board of Directors are currently examining a proposal received from FCA (Fiat Chrysler Automobiles) regarding a potential 50/50 merger between Renault S.A. and Fiat Chrysler Automobiles (FCA).
In an official statement, the French automaker said that 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, bolstering Groupe Renault’s manufacturing footprint and creating additional value for the Alliance. They added that further communication will be issued in due course to inform the market of the results of these discussions, in accordance with applicable laws and regulations.

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. Further, there would be no carryover of existing double voting rights. However, all shareholders would have the opportunity to earn loyalty voting rights from the completion of the transaction under a loyalty voting program. The parent company would be listed on the Borsa Italiana (Milan), Euronext (Paris) and the New York Stock Exchange. This merger (if it comes through) would make the future company the third largest in the world after Volkswagen and Toyota. Reports suggest that the deal is worth around 35 billion USD.