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Renault board expresses 'interest' in Fiat Chrysler merger offer

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Renault board expresses 'interest' in Fiat Chrysler merger offer

French carmaker Renault SA on May 27 expressed "interest" in the merger proposal by Fiat Chrysler Automobiles NV after a "careful review of the terms."

"After careful review of the terms of FCA's friendly proposal, the board of directors decided to study with interest the opportunity of such a business combination, comforting Groupe Renault's manufacturing footprint and creating additional value for the Alliance," Renault said in a statement.

Renault said it will issue a statement on the results of its discussions on the "friendly" merger proposal "in due course."

Earlier on May 27, Fiat Chrysler submitted an offer to Renault for a "transformative" all-share merger, under which the two carmakers would equally hold 50% each of the combined entity, with shareholders of both companies receiving an equivalent equity stake in the yet-to-be-named entity.

The Italian-American carmaker said that if completed, the combination would create the third-largest global automotive manufacturer with annual revenues of nearly €170 billion, operating profit of more than €10 billion and net profit of more than €8 billion. The merged entity would also result in annual sales of 8.7 million vehicles from brands such as Maserati, Alfa Romeo, Dacia, Lada, Fiat, Renault, Jeep and Ram.

The proposed deal is expected to be carried out as a merger transaction under a Dutch parent company, which will be listed on Milan's Borsa Italiana, Paris' Euronext and on the New York Stock Exchange.

Fiat Chrysler said it would join Renault's existing automotive alliance with Nissan Motor Co. Ltd. and Mitsubishi Motors Corp., confirming earlier reports. The company's proposal calls for the appointment of 11 board members, the majority of which will be independent, and with equal representation of four members each from both Fiat Chrysler and Renault, as well as one nominee from Nissan.

The proposed deal did not disclose the top leadership positions. However, multiple people close to the talks told the Financial Times (London) that John Elkann is expected to become chairman of the proposed combined company. The newspaper added that Renault chair Jean-Dominique Senard is likely to be named CEO, while the British chief at Fiat Chrysler, Mike Manley, is set to be the COO of the proposed joint entity.