Fiat Chrysler, Renault set to announce tie-up deal

Renault Cars

The world’s third biggest automaker is set to be shaped after Fiat Chrysler Automobiles NV and Renault SA, are reportedly in talks that could lead to a full merger of the French and Italian-American auto giants.

The deal could involve an initial exchange of equity, the people said, asking not to be identified because the discussions aren’t public.

The people, further said that Renault’s existing alliance partners, Nissan Motor Corp. and Mitsubishi Motors Corp, are not involved, although the partners would be invited at a later time to join forces with the merged Fiat-Renault.

As per the reports, Renault has moved ahead in talks with Fiat without its 20-year old partner Nissan, therefore, throwing intense pressure facing automakers to combine efforts and investments.

A French drive to forge closer ties with Nissan, which has resisted proposals to join with Renault in a holding-company structure, has been put on hold, the people said.

The companies are also likely to say that discussions include the possibility of an exchange of shareholdings, either through a share swap or an investment in each other’s business.

A full merger which could be structured as a merger of equals is also being considered, according to two people close to the plans.

Fiat Chrysler is best known in U.S. for the company behind the Jeep and Ram trucks. Its business is far larger.

Fiat, which has a market value of Rs 1,30,000 crore ($20 billion), is also one of Italy’s oldest companies and owns brands like Alfa Romeo, Fiat, Lancia, and Maserati.

Furthermore, Fiat acquired a stake in Chrysler in 2009. The FCA people know today which employs nearly 200,000 people was created when the companies merged in 2014.

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