Renault and Fiat Chrysler flirt with audacious mega-merger (Update)

After a board meeting over what it termed a

a

"friendly" offer, Renault said it would enter talks on a merger that would forge the world's third-largest automaker.

Investors cheered the prospect, with Renault's shares soaring 15 percent in afternoon trading in Paris, and Fiat Chrysler stock up more than 10 percent in Milan.

A deal would give Fiat access in particular to Renault's electric car technologies, allowing it to meet the strict CO2 limits being enacted by the European Commission.

Renault for its part might be able to tap the US market thanks to Fiat Chrysler's extensive operations in North America.

"Given the investments and the technological advances that are going to be necessary, there's isn't really a choice, you have to reach a critical mass," said Flavien Neuvy of the Cetelem Observatory research group.

The idea has the backing of the French government, which owns a 15 percent stake in Renault, after Fiat said the merger would not result in the closure of any production sites.

https://phys.org/news/2019-05-fiat-chrysler-merger-renault.html

"The government is in favour... but the terms of this merger must be supportive of Renault's economic development, and obviously of Renault's employees," government spokeswoman Sibeth Ndiaye said Monday.