Chrysler News: FCA Sends Merger Proposal to Renault

[Drew Dowdell]

FCA has sent a merger proposal to Renault in what would start as an operational tie-up leading to a full merger. The proposal is a 50/50 deal that will not involve Nissan or Mitsubishi and it estimated to be worth around $33 billion. Few details have been revealed, however, Renault's board said it would issue a press release after the meeting. Rumor has it that Renault is negotiating with FCA without the approval from Nissan or Mitsubishi.

If the merger does go through, it would happen over the next 12 months and the combined companies would rank 3rd in the world in terms of production, just behind Toyota and Volkswagen.  One complication to the deal is the French government's 15% stake in Renault. FCA has offered a guarantee to keep existing production locations but left the door open for white-collar job cuts. 

This comes after FCA turned down a merger proposal from PSA back in March of this year. 

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[smk4565]

More and more auto companies will merge.  I’d say this is a done deal and others will follow.

[William Maley]

This story has been bubbling up since Saturday when the Financial Times broke the story and has since been a countless stack of rumors.

I have to wonder if Renault is looking to use this possible alliance as a way to reduce Nissan's bargaining power. It is no secret that Nissan has been rebuffing Renault's effort to try and bring the two companies closer together - Nissan is the larger of the two, but Renault holds most of the power.

Or it could be seen as a possible fallback if the alliance between Renault/Nissan/Mitsubishi falters (a long shot, but one I wouldn't discount).

[Drew Dowdell]

4 hours ago, William Maley said:

This story has been bubbling up since Saturday when the Financial Times broke the story and has since been a countless stack of rumors.

I have to wonder if Renault is looking to use this possible alliance as a way to reduce Nissan's bargaining power. It is no secret that Nissan has been rebuffing Renault's effort to try and bring the two companies closer together - Nissan is the larger of the two, but Renault holds most of the power.

Or it could be seen as a possible fallback if the alliance between Renault/Nissan/Mitsubishi falters (a long shot, but one I wouldn't discount).

It's not by accident that the savings FCA says will come from the deal are almost exactly equal to the savings Renault gets from the alliance.

[Robert Hall]

Interesting..  Renault has EVs, compact and subcompact cars, and MPVs that could benefit FCA... FCA has Jeep and Ram and access to the NA market for Renault.   Going to be interesting to see what transpires..

[ocnblu]

[Robert Hall]

47 minutes ago, ocnblu said:

Imagine the possibilities for such a merger.  Could have a new Renault Alliance based off the Megane for Dodge dealers. 

[riviera74]

Somebody is going to have to cut production somewhere.  If FCA joins Renault, the French government will foolishly protect French workers instead of shutter the more inefficient ones.  Then again, it may require a depression to radically simplify the automotive industry.

[daves87rs]

1 hour ago, Robert Hall said:

Interesting..  Renault has EVs, compact and subcompact cars, and MPVs that could benefit FCA... FCA has Jeep and Ram and access to the NA market for Renault.   Going to be interesting to see what transpires..

I think with a shift coming in the market, this might be a smart move. A company that can cover all the bases combined.....

[smk4565]

Renault has a pretty full line.  They won't need Fiat, as Renault has small cars and small SUVs and commercial vans that they can co-develop the next generation Ram vans with Renault and sell those with different badges.  Jeeps lets Renault strengthen their SUV line up if they need it.  Dodge could be come the American version of Renault.  Lot of possibilities here to merge the lineups and stream line it all.

[David]

2 hours ago, riviera74 said:

Somebody is going to have to cut production somewhere.  If FCA joins Renault, the French government will foolishly protect French workers instead of shutter the more inefficient ones.  Then again, it may require a depression to radically simplify the automotive industry.

Best thing that could happen is for them to merge, global recession hit and they can then finally close all the inefficient factories and the French workers will revolt and hell will happen on earth!  

[Drew Dowdell]

The Renault Master and Ram ProMaster could be merged into a single product.
The Kangoo could become a ProMaster City.

Fiat the brand could be saved by platform sharing with some of Renault's small cars.

Dodge and Chrysler could be saved with Renault's mid-range vehicles. 

The issue will be Nissan's reaction.  But Renault owns 45% of Nissan, so they might not have much say.  I wonder if this would also give FCA a controlling interest in Nissan or if Renault would divest themselves first. 

New name.... FCAR?

[ocnblu]

Well, I hope this latest try works for them in the long run.  I had to post the Alliance, it seems ironic, almost like a soap opera, that Chrysler and Renault might be walking down the aisle... again, after their divorce so many years ago.

[David]

Seems Nissan has officially blessed this merger!

https://www.autonews.com/automakers-suppliers/nissan-sees-no-major-downside-fca-renault-merger

[ccap41]

Fiat + Nissan 

Can you imagine the bland and shtty vehicles to come from that corporation? 

[ocnblu]

Nissan's blandness, or at least the lion's share of it, rests squarely on their ridic reliance on the worst mechanical idear in recent automotive history:  THE CVT.

Plus, having first hand experience owning a FIAT-influenced Chrysler product, I'm not sure I like your tone, mister.

[Robert Hall]

Hmm... one can imagine some interesting synergies from such an alliance...Hellcat Maxima and Hellcat GT-R.   But seriously, I'd love to see FCA's inline 6 plan come to fruition and maybe see it in a new small Z car and a new generation of GT-R...Nissan has a great performance history, but they seem to have largely ignored it and let the Z and GT-R age while focusing on appliances.   I could see Nissan evolving their full size trucks to be Ram variants (which was proposed a decade or so ago?)... 

[ocnblu]

I think Nissan (and Toyota) should give up on full size trucks and concentrate on what made them popular in the past... mini trucks.  It is intriguing to think of a Ram midsize with Pentastar or the new inline 6 in a Nissan-shared midsize though.