PARIS: French automaker Renault said on Monday that it would study “with interest” a 50-50 merger proposal from Fiat Chrysler, a deal that could reshape the industry as Renault reviews its options following the arrest in Japan of its chief executive.
Renault had for years tied its strategy to a partnership with Japanese automaker Nissan but this has come into question after the arrest and subsequent ouster of Carlos Ghosn at both companies.
After a board meeting over what it termed a “friendly” offer, Renault said it would enter talks on a merger that would create additional value while bolstering its manufacturing footprint.
Investors cheered the prospect, with Renault’s shares soaring 15 per cent in midday trading in Paris, and Fiat Chrysler stock up more than 10 per cent in Milan.
The tie-up would forge the world’s third-largest automaker, giving Fiat access in particular to Renault’s electric car technologies.
Renault, for its part, could get access to Fiat Chrysler’s extensive US operations, and its expertise in trucks and SUVs.
The idea has the backing of the French government, which owns a 15 per cent stake in Renault, after Fiat said the merger would not result in the closure of any production sites.