The proposed merger of FCA and Renault has already been announced via an official statement by the two car groups , with FCA confirming its shipment — the key points of what it proposes to be also disclosed — and with Renault confirming its receipt.
The FCA proposal sent to Renault would result in a combined deal held in equal shares (50/50) by the two automobile groups. The new structure would spawn a new automotive giant, the third largest on the planet, with combined sales of 8.7 million vehicles and a strong presence in key markets and segments.
The group would thus have a guaranteed presence in practically all segments, thanks to a diversified portfolio of brands, from Dacia to Maserati, passing through the powerful North American brands Ram and Jeep.
The reasons behind this proposed merger are easy to understand. The automotive industry is going through its biggest transformation phase ever, with the challenges of electrification, autonomous driving and connectivity requiring massive investments, which are easier to monetize with massive economies of scale.
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One of the main benefits is, of course, the resulting synergies, meaning estimated savings of five billion euros (FCA data), adding to those that Renault already obtains with its alliance partners, Nissan and Mitsubishi — FCA has not forgotten the Alliance partners, estimating additional savings of approximately one billion euros for the two Japanese manufacturers.
Another highlight of the proposal also refers that the merger of FCA and Renault does not imply the closure of any factory.
And Nissan?
The Renault-Nissan Alliance is now 20 years old and is going through one of its most difficult moments, after the arrest of Carlos Ghosn, its top manager — Louis Schweitzer, Ghosn's predecessor at the helm of Renault, was the one who established the alliance with the Japanese manufacturer in 1999 — at the end of last year.
A merger between Renault and Nissan was in Ghosn's plans, a move that met with huge resistance from Nissan's management, looking for a rebalancing of power between the two partners. Recently, the theme of the merger between the two partners has been discussed again, but so far, it has not resulted in practical effects.
The proposal sent by the FCA to Renault left Nissan aside, despite being mentioned in some of the disclosed points of the proposal, as mentioned.
Renault now has the FCA proposal in its hands, with the management of the French group meeting since this morning to discuss the proposal. A statement will be issued after the end of this meeting, so we will know shortly whether the historic merger of FCA and Renault will go ahead or not.
Source: Automotive News.