Fiat & Renault to seek $35 billion merger to combat uphill battle

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Fiat & Renault to seek $35 billion merger to combat uphill battle

On Monday, the 27th of May 2019, the Italian carmaker Fiat Chrysler and French Renault SA had set the stages of a nicely pitched merger in order to grapple with the costs of continuously evolving regulatory changes and far-reaching technological battles, making it the world’s third-largest automaker.

If the merger deal could successfully march ahead, the tie-up worth of $35 billion would have the potentiality to alter the auto industry portrait for rivals of both Fiat and Renault, including General Motor and the Peugeot maker PSA group, who had also been in inconclusive talks with Fiat Chrysler officials, sources with knowledge regarding the tie-up had unveiled on Monday (May 27th).

Meanwhile, Renault SA officials had been quoted saying that they had been reviewing the proposals of the Italian-American carmaker Fiat Chrysler and so far, treating it as a friendly pitch. Apart from that, shares of both Renault and Fiat had surged more than 10 percent since the reveal of merger talk, as investors appeared to be cordially greeting the prospects of a larger auto business on Europe, capable of producing more than 8.7 million a year and generating a lump-sum of $5.6 billion (5 billion euros) per annum, while shares of the automakers’ rivals, such as PSA and General Motor sank.

If the merger could take place, it would have ranked as the world’s third largest auto industry giant as beforementioned, behind Japan’s Toyota and Germany’s Volkswagen.