FCA says the proposal was made following previous discussions between the two carmakers. Judging by what FCA is saying, Nissan, as a partner for Renault, will also be involved in the new company.
As per FCA, the new business will be run by a new Dutch parent company whose board will comprise 11 members: four members each for FCA and Renault, one for Nissan and the rest independent.
The financial details of the deal were not disclosed, but FCA says their proposal will generate annual run-rate synergies in excess of €5 billion.
The merger proposition does not call for any plants to be closed, the company adds.
“The benefits of the proposed transaction are not predicated on plant closures, but would be achieved through more capital efficient investment in common global vehicle platforms, architectures, powertrains and technologies,” FCA says.
Should the deal between Fiat Chrysler and Renault go through, the resulting entity would become the third largest car manufacturer in the world, with combined sales of around 8.7 million vehicles annually and access to nearly any market imaginable.
The official Renault response is expected shortly, as the company’s board will meet later today for talks. You can read the FCA proposal in the press release section attached below.