Fiat Chrysler brings a “transformative” proposal to its rival Renault, which involves an “all-share merger”. The news was announced by the Italian-American auto manufacturer on Monday, May 27, 2019. This step suggestion has been made for creating a “new third-ranked global manufacturer”.
The board of the French group held an early meeting today to discuss about the proposal of FCA which was finalised following overnight dialogue between both the companies. Thanks to this deal an auto-manufacturer with the capacity of selling around “8.7 million vehicles” annually would be exposed to a “strong presence across key regions, automotive markets and technologies”.
Moreover, the FCA’s statement further mentioned that through this deal the company would be able to “generating 5 billion euros”, which equates to “$5.6 billion” as its annual savings. The statement read that the “broad and complementary brand portfolio would provide full market coverage, from luxury to mainstream”.
The deal has been proposed to merge both the auto manufacturer under “a listed Dutch holding company”. While Reuters reported that:
“After payment of a 2.5 billion- euro special dividend to FCA shareholders, each group would receive 50 percent of the combined entity in new stock”.
Electrification, expenses of new technologies that are pushing towards “connected and autonomous vehicles” market coupled with the “tightening emissions regulations” are reason enough to compel the auto-manufacturers to consider consolidation in order to cope with the challenges.
References:
reuters.com
The board of the French group held an early meeting today to discuss about the proposal of FCA which was finalised following overnight dialogue between both the companies. Thanks to this deal an auto-manufacturer with the capacity of selling around “8.7 million vehicles” annually would be exposed to a “strong presence across key regions, automotive markets and technologies”.
Moreover, the FCA’s statement further mentioned that through this deal the company would be able to “generating 5 billion euros”, which equates to “$5.6 billion” as its annual savings. The statement read that the “broad and complementary brand portfolio would provide full market coverage, from luxury to mainstream”.
The deal has been proposed to merge both the auto manufacturer under “a listed Dutch holding company”. While Reuters reported that:
“After payment of a 2.5 billion- euro special dividend to FCA shareholders, each group would receive 50 percent of the combined entity in new stock”.
Electrification, expenses of new technologies that are pushing towards “connected and autonomous vehicles” market coupled with the “tightening emissions regulations” are reason enough to compel the auto-manufacturers to consider consolidation in order to cope with the challenges.
References:
reuters.com
