The two giants come together

According to Automotive News, Fiat Chrysler Automobiles (FCA) made a share exchange, a global partnership for the French Renault car manufacturer.

According to FCA's announcement, a new company would be owned which would own 50 percent of FCA's shares and 50 percent of Renault's papers. (Renault's 15 percent is currently owned by the French government, which has also been involved in the negotiations.) The FCA's proposal, as it was written, was finalized in one-day talks and the proposal was discussed at the Renault's Monday forum. If the business is actually established, it would be one of the world's largest automotive companies, which can greatly improve the competitiveness of the individual players. One example of this is that the utilization of most of Fiat-Chrysler's European factories is currently under 50 percent.

The deal meant the birth of a car manufacturer that sells 8.7 million vehicles a year, a major player in key markets and a total savings of € 5 billion per year for the players, according to FCA's calculations. According to the proposed transaction, the two car manufacturers would be merged under the name of a Dutch holding company and the combined entity would issue new shares.

Similar steps are needed at the moment in the automotive industry because electrification, stricter emissions regulations and self-propelled vehicle developments put a three-fold cost pressure on companies that have embarked on a consolidation process.

Interestingly, the move will be matched with Renault's current alliance with Nissan and Mitsubishi, but this partnership will also be renegotiated by the French-Japanese group leader Carlos Ghosn's fall.

(Source: hvg.hu / photo: pixabay.com)