fca asks to marry Renault. After the rumors of recent days, the official news has arrived: Fiat Chrysler Automobiles announces that it has sent the French group a non-binding letter with the proposal of an equal merger.
The merged company would be the largest automotive group in the world. The capital would be divided 50% between the shareholders of FCA and those of Groupe Renault – reads the press release – with a joint governance structure and a majority of independent directors.
“The merger – specifies the note – it will not lead to any plant closures".
According to Fiat Chrysler, the merger will create the third largest Original Equipment Manufacturer (OEM), with 8,7 million vehicles sold, a strong market presence in key regions and segments and fully operational synergies of over 5 billion euros .
The broad and complementary brand portfolio would provide comprehensive coverage of the market, from the luxury segment to the mainstream.
The new group "would become a world leader in the rapidly evolving automotive sector with a strong positioning in new technologies - adds FCA - including electric and self-driving vehicles".
Le annual synergies when fully operational they are estimated at “over 5 billion”, with “a combined strong balance sheet that allows for flexible capital allocation and a solid dividend policy”, continues the note, and with significant benefits for the other partners of the Alliance.
FCA's proposal follows initial operational dialogues between the two companies to identify products and geographic areas in which they could collaborate, particularly in the development and marketing of new technologies.
These contacts made it clear that a a combination would substantially improve capital efficiency and speed product development. The need for aggregation is also reinforced "by the need to take courageous decisions to seize on a large scale the opportunities that have arisen in the automotive sector in fields such as connectivity, electric and self-driving vehicles".
The proposed combination would create one of the world's leading automakers in terms of revenue, volume, profitability and technology for the benefit of the companies' respective shareholders and stakeholders. The post-merger company, FCA continues, it would sell about 8,7 million vehicles annually, would be a world leader in EV technologies, premium brands, SUVs, pickup trucks and commercial vehicles, and would have a larger and more balanced global presence than either company alone.
Il Renault's board has decided to evaluate the opportunity "with interest" of a merger with FCA, the French group announced at the end of this morning's board meeting. The council, reads a note, "after having carefully evaluated the terms of the friendly proposal, has decided to study with interest the opportunity of such a combination". the 3 a
Il French government, which is the largest shareholder of Renault with a 15% stake, he is "quite in favour" of the merger project with FCA, according to government spokeswoman Sibeth Ndiaye.
"Of course, we have to look at the conditions under which the agreement will be concluded - they must be favorable to the economic and industrial development of Renault and its employees - it is a discussion that we will have with Renault as a shareholder," explained the spokeswoman, adding that it is good for Europe as a whole to have European industrial 'giants'.
Meanwhile, at the Milan Stock Exchange, the title of FCA dominates the increases of the Ftse Mib with a spectacular +8%, at 12,374 euros. Exor follows in the ranking of the most bought shares: +5%, to 59,3 euros.
In the afternoon, speaking at the Bocconi University in Milan on the occasion of the assignment of the professorship named after Avvocato Agnelli, the president of FCA (and of the Agnelli Foundation which finances the chair) John Elkann he spoke to journalists: “I'm happy that as happened in 2009, exactly ten years ago, for the agreement with Chrysler – said the lawyer's nephew – it is again at Bocconi that we announce this new important operation. I hope that the next 10 years will be as positive as the last ten have been: the experience with FCA has been very encouraging and now the partnership with the French and the Japanese will make us the largest manufacturer in the world. Fiat – added Elkann – was born 120 years ago, as was Renault, and it has many challenges ahead of it, to be faced with courage as it was in 2009. These operations are beneficial, there will be no impact on the Italian plantsindeed, Italy will benefit from it”.
In the meantime, the first reactions of the trade unions arrive: "For us - comments the general secretary of the Fim Cisl, Marco Bentivogli – if the agreement between the two groups goes through, there are great opportunities but also some reasons why a close confrontation will be necessary”.
“It is clear – continues the trade unionist – that for us the focus remains on safeguarding jobs in Italy and on the group's ability to stay within these great transformations. Now it is appropriate to immediately open a discussion with the company, it is necessary that if the alliance goes through, it is necessary to have a strategy of integration and enhancement of FCA workers who have high training and Italian sites among the best of the FCA Group in terms of technology and work organization”.
Article updated at 16.17 pm on Monday 27 May
