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Fiat Chrysler presents plan for merger with Renault

MILAN: Italian-US auto giant Fiat Chrysler presented a merger proposal to France’s Renault on Monday that would create the world’s third-largest automaker.

Fiat Chrysler delivered a non-binding letter to Renault proposing “a combination of their respective businesses as a 50/50 merger”, with a group that would be listed in Paris, New York, and Milan, it said in a statement. Renault said its board would meet on Monday to discuss the offer.

According to a source within the French company, the meeting began at 8 am (0600 GMT) at Renault’s Boulogne-Billancourt headquarters near Paris. The source said, however, that a decision was not expected by the close of the day: “it will take days or even weeks”. 

Monday’s board session would merely examine whether or not to explore the offer on the table, the source said. After the news broke, shares in Fiat Chrysler Automobiles (FCA) soared 18 percent when the Milan stock exchange opened today, before falling back slightly. 

The French government is “in favor” of a potential tie-up between Renault and Fiat-Chrysler, a deal that could create the world’s third-largest automaker, a spokesperson said today.

“The government is in favor…but the terms of this merger must be supportive of Renault’s economic development, and obviously of Renault’s employees,” Sibeth Ndiaye said on BFM television.

Relevant: Stocks in Italian-US auto giant Fiat Chrysler shot up Monday after the company proposed a merger to France’s Renault that would create the world’s third-largest automaker. After jumping more than 18 percent, FCA was up 15.66 percent at 9:15 (0715 GMT) following its proposal to combine their respective businesses as a 50/50 merger.

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M M Alam

M. M. Alam is a Pakistan-based working journalist since 1981. Karachi University faculty gold medalist Alam began his career four decades ago by writing for Dawn, Pakistan’s highest circulating English daily. He has worked for region’s leading publications, global aviation periodicals including Rotors (of USA) and vetted New York Times as permanent employee of daily Express Tribune. Alam regularly covers international aviation and defense-related events including Salon Du Bourget (France), Farnborough (United Kingdom), Dubai (UAE). Alam has reported thousands of events and interviewed hundreds of people in Pakistan, UAE, EU, UK and USA. Being Francophone Alam also coordinates with a number of French publications.