Fiat Chrysler proposed on Monday to merge with France's Renault to create the world's third-biggest automaker and save billions of dollars needed to invest in the race to make new electric and autonomous vehicles, the AP reports. The merged company would reshape the global industry: It would make some 8.7 million vehicles a year, leapfrogging General Motors and trailing only Volkswagen and Toyota. Shares of both companies jumped over 10% on the news of the offer, which would see each side's shareholders split ownership in the new manufacturer. Renault welcomed the idea. The company's board met Monday at its headquarters in Boulogne-Billancourt outside Paris to discuss the proposal and said afterward that Renault will study it "with interest."
Fiat Chrysler's offer comes at a key moment for Renault. The French manufacturer had reportedly wanted to merge with Nissan, but those plans were derailed by the arrest of boss Carlos Ghosn on financial misconduct charges in Japan. Now, questions are growing over the Renault-Nissan-Mitsubishi alliance, which is the biggest maker of passenger cars in the world. While Fiat Chrysler says the merger with Renault would accommodate the alliance, it is unclear how the Japanese companies might react in the longer term to being tied to a much larger partner. The French government, which owns 15% of Renault, is "favorable" to the idea of a merger with Fiat Chrysler but wants to study its conditions more carefully.
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