France says local plants must stay open in Renault-Fiat merger plan

Fiat Chrysler said to be in advanced talks to ally with French automaker Renault

Italian-American carmaker Fiat Chrysler Automobiles on Monday said it has proposed a "transformative merger" with Renault to create the world's third largest automaker.

The transaction will be structured as a 50-50 ownership through a Dutch holding company, FCA said, adding that it would give Renault investors an implied premium of about 10 percent.

Fiat and Renault have moved ahead without the French carmaker's 20-year partner, Nissan, and Mitsubishi Motors, the other member of their three-way alliance.

In a separate statement, Renault confirmed receipt of the FCA proposal and notes that after reviewing the offer, its board will "study with interest" the merger's benefit with regards to the existing Renault-Nissan Alliance.

- Costly shift - Fiat Chrysler has been under pressure in Europe, stoking speculation it was looking for a partner as the highly competitive industry is pushed to consolidate in the face of declining demand and the costly switch to electric cars. Ferdinand Dudenhoeffer, head of the auto automotive research center at the Duisburg-Essen University, said Ghosn's plans to merge Renault with Nissan-Mitsubishi had "little appeal" for the Japanese. Fiat and Renault expect their joint annual synergies to amount to more than 5 billion euros, coming from areas such as purchasing power.

Investors were nevertheless enthusiastic about Fiat Chrysler's plan, pushing the company's shares up 8% and Renault's 12%.

Bart Starr, QB who led Packers to greatness, dies at 85
He's in the Pro Football Hall of Fame , after all, and won the NFL's Most Valuable Player Award for the 1966 season. The game has been nicknamed the "Ice Bowl" due to the -15 F temperature and -48 F wind chill at Lambeau Field.

It is a bitter pill to swallow for Nissan, which appeared to be completely left in the dark about the project and is already battling falling sales amid reputational damage from the downfall of Ghosn, who is fighting financial misconduct charges. The company had considered options for the unit late past year, including a potential sale at a value of 1.5 billion euros to 2 billion euros, Bloomberg reported in November. If the deal goes through, the combined entity is expected to provide full market coverage, from luxury to mainstream.

"They will need Nissan's agreement for it to be used by Fiat Chrysler", Pelata told BFM radio on Tuesday.

"The advantages to FCA in Canada could be additional markets for the minivan plant in Windsor and new platform options for the auto plant in Brampton", said Flavio Volpe, president of the Automotive Parts Manufacturers' Association, in an email. The French state, which owns 15% of Renault, does not oppose the merger, sources from the Wall Street Journal said.

FCA said the merger would not lead to any production sites closing down but didn't make as specific a pledge regarding jobs.

In a statement, FCA said that the planned merger would create a "world leader in the rapidly changing automotive industry with a strong position in transforming technologies, including electrification and autonomous driving".

Fiat has history with French President Emmanuel Macron, whose support would be needed along with Italian officials for a deal that could involve major job cuts in France and Italy.


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