Renault, Fiat Chrysler Discuss Merger of Equals as Part of Alliance Talks--2nd Update

By Nick Kostov and Eric Sylvers 

Renault SA and Fiat Chrysler Automobiles NV have discussed the possibility of a merger as they explore options for combining their businesses, according to people familiar with the matter.

Talks between the two sides were in an advanced stage on Sunday and included a range of possible outcomes, the people said. The companies are expected to announce on Monday an agreement to cooperate in areas that include electric vehicle technology, manufacturing platforms and connectivity, the people said.

The companies could also announce they are studying a merger of equals, the people said. That would create a car company with a combined value of about $37 billion and annual vehicle production of almost 9 million passenger cars and light trucks.

Another option under discussion is for Fiat Chrysler and Renault to swap shares as part of an initial accord that paves the way for a merger at a later date, the people said.

"This is definitely about more than a platform or a JV," a person familiar with the matter.

Renault Chairman Jean-Dominique Senard met with French Finance Minister Bruno Le Maire on Friday and presented the merger plan, the person added. The French state, which owns 15% of Renault, is not opposed to a merger, the person said.

Renault has called a board meeting for Monday, another person familiar with the matter said.

A spokeswoman for Mr. Le Maire couldn't be immediately reached for comment.

There is no guarantee the parties will reach an agreement, and the people familiar with the talks cautioned the negotiations could fall apart.

Renault and Fiat Chrysler are both considered symbols of national industry in their home countries, and national pride has often kept car makers across Europe independent. But as demand slows for new cars, companies are more closely weighing the advantages of global scale.

Write to Nick Kostov at [e-mail] and Eric Sylvers at [e-mail]

(END) Dow Jones Newswires

May 26, 2019 16:56 ET (20:56 GMT)

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