Fiat Chrysler - Renault Merger | FerrariChat

Fiat Chrysler - Renault Merger

Discussion in 'General Automotive Discussion' started by Abdurahman Kariel, May 27, 2019.

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  1. Abdurahman Kariel

    May 10, 2019
    12
    Full Name:
    akariel
    https://www.reuters.com/article/us-fiat-chrysler-renault/fiat-chrysler-makes-merger-offer-to-renault-idUSKCN1SX0DI

    MILAN/PARIS (Reuters) - Fiat Chrysler has made a “transformative” merger proposal to Renault, the Italian-American carmaker said, in a deal that would create a new third-ranked global manufacturer.

    The plan, finalised in overnight talks with Renault, was being discussed at a meeting of the French group’s board early on Monday, and sent shares in both companies sharply higher.

    The deal would create a carmaker selling 8.7 million vehicles annually with a strong presence across key regions, automotive markets and technologies, FCA said. It would generate 5 billion euros ($5.6 billion) in estimated annual savings.

    The “broad and complementary brand portfolio would provide full market coverage, from luxury to mainstream,” FCA added.

    If successful, the tie-up would alter the competitive landscape for rival carmakers from General Motors to Peugeot maker PSA Group, which recently held its own inconclusive talks with FCA.

    It could also have profound repercussions for Renault’s 20-year-old alliance with Nissan, already weakened by the crisis surrounding the arrest and ouster of former chairman Carlos Ghosn late last year.

    Milan-listed Fiat Chrysler shares jumped 19% in early trade, while Renault stock leapt 17%. PSA shares fell 2.5%.

    “FCA fits as well with Renault as it does with PSA,” Jefferies analyst Philippe Houchois said in a note after news of the deal talks broke.

    The FCA-Renault plan would see the two carmakers merged under a listed Dutch holding company. After payment of a 2.5 billion-euro dividend to current FCA shareholders, each investor group would receive 50 percent of stock in the new company.

    It would be chaired by John Elkann, head of the Agnelli family that controls 29 percent of FCA, sources familiar with the deal talks told Reuters. Renault chairman Jean-Dominique Senard would likely become CEO, one said.

    FCA-Renault, like almost every possible automotive pairing, had been studied intermittently for years by dealmakers. But the fractious relations between Ghosn and FCA’s late CEO Sergio Marchionne made constructive merger talks impossible until after Marchionne’s sudden death last July, banking sources said.

    Pressure for consolidation among carmakers has grown with the challenges posed by electrification, tightening emissions regulations and expensive new technologies being developed for connected and autonomous vehicles.

    “The case for combination is also strengthened by the need to take bold decisions to capture at scale the opportunities created by the transformation of the auto industry,” FCA said.

    But the deal still faces political and workforce hurdles in Italy, and potentially also in France. Most of FCA’s European plants are running below 50% capacity.

    Fiat said the planned cost savings would not depend on factory closures.

    “The market will be careful with these synergy numbers as much has been promised before and there isn’t a single merger of equals that has ever succeeded in Autos,” Evercore ISI analyst Arndt Ellinghorst said in an email.

    Investors are likely to remain wary of the execution risks of a French-Italian-U.S. tie-up, he added, “even with fewer big egos involved”.

    The French government, Renault’s biggest shareholder with a 15% stake, supports the merger in principle but will need to see more details, its main spokeswoman said on Monday.

    France will be “particularly vigilant regarding employment and industrial footprint,” another Paris official said - adding that any deal must safeguard Renault’s alliance with Nissan, which had recently rebuffed a merger proposal from the French carmaker.

    The Italian government may also seek a stake in the combined group to balance France’s holding, a lawmaker from the ruling League party said on Monday.

    Anticipating such sensitivities, FCA stressed “new opportunities for employees of both companies” under the merger.

    “The benefits of the proposed transaction are not predicated on plant closures, but would be achieved through more capital-efficient investment in common global vehicle platforms, architectures, powertrains and technologies,” it said.

    Nissan, which is 43.4%-owned by Renault, would be invited to nominate a director to the 11-member board of the new combined company, under the plan presented on Monday.

    As alliance partners, Nissan and its affiliate Mitsubishi would benefit from an estimated 1 billion euros in annual savings from the merger, FCA also said.
     
    polishhammer83 likes this.
  2. AbarthDave1

    AbarthDave1 Formula Junior

    Nov 7, 2015
    328
    Marietta
    Just got back from Italy a week ago. I was so impressed by the new Renaults that I saw that I took 0 pictures of them.:)
    Let's hope they let the Fiat side keep designing the cars.

    Dave
     
  3. Tcar

    Tcar F1 Rookie

    Would this happen if Marchionne was still at the helm of FCA?
     
  4. fastback33

    fastback33 Formula 3

    Mar 8, 2004
    1,851
    I actually really like renault's design language. If nissan wasn't so ****ing stubborn they could've just peddled rebadged renault's and profited from it. A new Renault megane rs badged as a Sentra se-r? Yes please!
     
    Boomhauer likes this.
  5. fastback33

    fastback33 Formula 3

    Mar 8, 2004
    1,851
    I think it could've been highly likely. Dont forget Sergio was trying to peddle the auto maker back when he was alive just as much as they are now.
     
  6. Abdurahman Kariel

    May 10, 2019
    12
    Full Name:
    akariel
    Yes, it was mentioned somewhere that this deal is in the spirit of Sergio.
     
  7. Abdurahman Kariel

    May 10, 2019
    12
    Full Name:
    akariel
    Imagine a GTR having Ferrari tech :D
     
  8. Sig. Roma

    Sig. Roma Formula 3
    Owner Silver Subscribed

    Mar 11, 2007
    1,061
    Bella Italia
    Full Name:
    Dom T.
    I think the merger would give the company immense possibilities across the entire automotive market.
     
  9. MalcQV

    MalcQV F1 Rookie

    Oct 11, 2004
    3,292
    Manchester, UK
    Full Name:
    Malc Holden
    Although FCA technically do not own Ferrari (their shareholders do) would that make my 360 a Renault? :eek:o_O
     
  10. Etcetera

    Etcetera Two Time F1 World Champ
    Silver Subscribed

    Dec 7, 2003
    22,179
    Full Name:
    C9H8O4
    Looks good to me. There are too many players for a declining market anyway.

    I bet Nissan is now feeling REALLY stupid for having Ghosn thrown in jail. They are going to go from sharing a few platforms to making tailpipe hangers for Renault's commercial trucks. Meanwhile, Renault will now have access to a lot of US dealers if they chose to go that route.
     
    polishhammer83 likes this.
  11. TheMayor

    TheMayor Nine Time F1 World Champ
    Rossa Subscribed

    Feb 11, 2008
    98,535
    Vegas baby
    Eventually there will be only 3 auto companies in the world.
     
  12. MalcQV

    MalcQV F1 Rookie

    Oct 11, 2004
    3,292
    Manchester, UK
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    Malc Holden
    VW/VAG
    Toyota
    ?
     
  13. TheMayor

    TheMayor Nine Time F1 World Champ
    Rossa Subscribed

    Feb 11, 2008
    98,535
    Vegas baby
    Ford
     
  14. MalcQV

    MalcQV F1 Rookie

    Oct 11, 2004
    3,292
    Manchester, UK
    Full Name:
    Malc Holden
    Wondered whether it might be GM. Anyway I agree in principle.
     
  15. Abdurahman Kariel

    May 10, 2019
    12
    Full Name:
    akariel
    I wonder what this means for F1, Ferrari, Renault and Alfa teams.
     
  16. Abdurahman Kariel

    May 10, 2019
    12
    Full Name:
    akariel
    #16 Abdurahman Kariel, May 30, 2019
    Last edited: May 30, 2019
    Anyone notice the similarity between the SF90 and Megane headlights? :D
     
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