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Fiat Chrysler Automobiles Proposes 50/50 Merger With Renault

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Fiat Chrysler Automobiles N.V. (FCAU) has submitted a 50/50 merger proposal to the Board of Groupe Renault (RNSDY.PK,RNSDF.PK,RNT.L). Under the proposal, the combined company would be owned 50% by FCA shareholders and 50% by Groupe Renault shareholders. Separately, Groupe Renault confirmed it has received a proposal from FCA. Renault said its Board of Directors will discuss the proposal immediately.

The FCA noted that its proposal follows initial operational discussions with Groupe Renault. The proposed combination is projected to benefit the resulting company to advance in the areas of connectivity, electrification and autonomous driving. Based on 2018 results, the combined company's annual revenues would be nearly 170 billion euros with operating profit of more than 10 billion euros and net profit of more than 8 billion euros.

Under the proposal, FCA shareholders would receive a dividend of 2.5 billion euros. FCA's shareholders will also receive a distribution of Comau's shares. The proposed deal is projected to result in excess of 5 billion euros of annual run rate synergies. Following the closing of the deal, the parent company would be listed on the Borsa Italiana, Euronext (Paris) and the NYSE.

Under the proposal, the combined company would have a 11-member Board, with equal representation of four members from FCA and Groupe Renault, and one nominee from Nissan. The combination is not expected to result in any plant closures. As per Fiat Chrysler's estimates, the combined company would sell approximately 8.7 million vehicles on an annual basis.

The proposed combined company together with Nissan and Mitsubishi partner companies would result in a global OEM alliance, selling more than 15 million vehicles on a per year basis. The proposed merger is estimated to benefit both Nissan and Mitsubishi with an incremental 1 billion euros annually.

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