Whenever I hear the word “synergies” mentioned by a company I immediately think of job losses. It happens in our little media bubble a lot but today it’s been announced Fiat Chrysler Automobiles (FCA) has approached Renault for a potential 50/50 merger.
The friendly non-binding letter outlines a host of “synergies” to bring the two giants together. The plan would result in a massive market presence covering many parts of the globe and vehicle segments.
FCA propose a 50/50 ownership situation in terms of shareholders and a Board of Directors being mostly independent. But back to job loses, FCA state that there would be no plant closures as a result of the merger. The savings would be achieved via more efficient global vehicle platforms.
The merger has the potential to deliver a company that has immense capabilities when it comes to transforming technologies, such as connectivity, electrification and autonomous driving.
The proposal also extends to the existing Renault-Nissan-Mitsubishi Alliance. The deeper details of the plan include shareholders in each company receiving an equivalent equity stake in the combined company. The actual transaction would take place under a Dutch parent company. The new combined board would begin with 11 members with independent and equal representation for both FCA and Renault, along with one nominee from Nissan.
The company would be listed on the Milan, Paris and New York Stock Exchange. The brands that would fall under this deal are far and wide reaching including, Maserati and Alfa Romeo, Dacia, Lada, Fiat, Renault, Jeep and Ram brands as well as commercial vehicles.
FCA’s has already partnered with Waymo, BMW and Aptiv when it comes to autonomous driving technologies. The alliance all up would form the largest Original Equipment Manufacturer (OEM) in the world, shifting 15 million vehicles annually.
Renault’s Board of Directors has shown interest in the deal and will issue more commentary surrounding the matter in due course.