FCA submits proposal for a tranformative merger with Groupe Renault

FCA submits proposal for a tranformative merger with Groupe Renault

27.05.2019: ...to create preeminent global automotive group ē Combined business to be 50% owned by FCA shareholders and 50% by Groupe Renault shareholders - balanced governance structure and majority of Board of Dire

...to create preeminent global automotive group





•    Combined  business to  be  50% owned  by  FCA shareholders and  50% by Groupe Renault shareholders - balanced  governance structure and majority of Board of Directors being independent


•    Combination would  create the 3rd largest  global  OEM with 8.7m vehicle  sales and a strong market presence  in key regions and vehicle  segments


•    Broad   and   complementary  brand   portfolio  would   provide  full   market coverage,  from luxury to mainstream


•    Combined   company  would   be  a  world   leader   in  the  rapidly  changing automotive industry with  a strong position in  transforming technologies, including electrification and autonomous driving


•    No plant closures as a result of the combination


•    In excess  of 5 billion Euros estimated annual  run  rate synergies incremental to existing Renault-Nissan-Mitsubishi Alliance (Alliance) synergies


•    Strong  combined balance  sheet  allowing for  flexible  capital  allocation and robust dividend policy


•    Significant benefits  to the other Alliance partners including ~1 billion Euro of additional estimated run rate synergies







Fiat Chrysler Automobiles N.V. has today delivered a non-binding letter to the Board of Groupe Renault proposing a combination of their respective businesses as a 50/50merger.



The FCA proposal follows initial operational discussions between the two companies to identify products and geographies where they could collaborate, particularly as they develop and commercialize new technologies.



These discussions made clear that broader collaboration through a combination would substantially improve capital efficiency and the speed of product development. The case for combination is also strengthened by the need to take bold decisions to capture at scale the opportunities created by the transformation  of  the  auto  industry  in  areas  like  connectivity,  electrification  and autonomous driving.



The proposed combination would create a global automaker, preeminent in terms of revenue, volumes, profitability and technology, benefitting the companies' respective shareholders and stakeholders. The combined business would sell approximately 8.7 million vehicles annually, would be a world leader in EV technologies, premium brands, SUVs, pickup trucks and light commercial vehicles and would have a broader and more balanced global presence than either company on a standalone basis.



The benefits of the proposed transaction are not predicated on plant closures, but would be achieved through more capital efficient investment in common global vehicle platforms, architectures, powertrains and technologies. FCA has a history of successfully combining OEMs with disparate cultures to create strong leadership teams and organizations dedicated to a single purpose. Therefore, FCA's Board strongly believes that this combination, which would have the scale, expertise and resources to navigate the rapidly changing automotive industry, would create new opportunities for employees of both companies and for other key stakeholders.



Under the terms of the proposal, shareholders in each company would receive an equivalent equity stake in the combined company. The combination would be carried out as a merger transaction under a Dutch parent company. The Board of the combined entity would initially be composed of 11 members, with the majority being independent and with equal representation of four members each for both FCA and Groupe Renault, as well as one nominee from Nissan.



Further, there would be no carryover of existing double voting rights. However, all shareholders would have the opportunity to earn loyalty voting rights from  the  completion  of  the  transaction  under  a  loyalty  voting  program.  The  parent company would be listed on the Borsa Italiana (Milan), Euronext (Paris) and the New York Stock Exchange.



The benefits flowing from the combination of the two businesses would be shared, 50% by current FCA shareholders and 50% by current Groupe Renault shareholders. Before the transaction is closed, to mitigate the disparity in equity market values, FCA shareholders would also receive a dividend of 2.5 billion Euros (see Appendix). In addition, prior to closing, there would be a distribution of Comau's shares to FCA's shareholders or an incremental 250 million Euros dividend if the Comau spin-off does not occur.



Combining the businesses will bring together complementary strengths. The combination would create a brand portfolio that would provide full market coverage with a presence in all key segments from luxury/premium brands, such as Maserati and Alfa Romeo, to the strong access brands of Dacia and Lada, and would include the well-known Fiat, Renault, Jeep and Ram brands as well as commercial vehicles.



Groupe Renault has a strong presence  across  Europe,  Russia,  Africa  and  Middle  East,  while  FCA  is  uniquely positioned in the high margin segments in North America and is a market leader in Latin America. FCA's evolving capability in autonomous driving, which includes partnerships with  Waymo,  BMW  and  Aptiv,  is  complemented  by  Groupe  Renault's  decade  of experience in EV technology where it is the highest selling EV OEM in Europe. Groupe Renault also has a well-established and profitable financing business (RCI Banque).



The combination would be highly value accretive for both FCA and Groupe Renault shareholders, delivering in excess of 5 billion Euros of estimated annual run rate synergies, incremental to existing Alliance synergies. These synergies would arise principally from the  convergence  of  platforms,  the  consolidation  of  powertrain  and  electrification investment and the benefits of scale. FCA estimates based on its experience, that approximately 90% of synergies would come from purchasing savings (~40%), R&D efficiencies (~30%), and manufacturing and tooling efficiencies (~20%).



 Included in these estimated savings would be the potential to reduce the combined number of vehicle platforms by approximately 20% and engine families by approximately 30%. The full run rate of estimated synergies is expected to be achieved by the end of year six following closing, with about 80% achieved in year four. Taking into account the impact of the approximately 3-4 billion Euros in cumulative implementation costs, it is estimated that the synergies would be net cash flow neutral in year one and positive from year two onward.



Geographically, based on FCA and Groupe Renault's 2018 global sales, the combined company would be #4 in North America, #2 in EMEA and #1 in Latin America and would have the increased resources necessary to grow its footprint in the APAC region. On a simple aggregated basis of 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.



While the proposal focuses on a combination of FCA and Groupe Renault, FCA looks forward - as part of a combined enterprise with Groupe Renault - to working with Groupe Renault's Alliance partner companies on ways to create additional value for all Alliance members. FCA recognizes the standing and achievements of Groupe Renault's partners and sees significant expected benefits to all parties from the expanded partnership.



The FCA and Groupe Renault combination together with its Nissan and Mitsubishi partners would be the largest global OEM alliance, selling more than 15 million vehicles annually. The additional synergies stemming from the merger of FCA and Groupe Renault that are expected to accrue to Nissan and Mitsubishi purely as members of the Alliance are estimated to be worth an incremental 1 billion Euro annually.



This proposal offers the opportunity to create the #3 global automotive company with broad,  complementary  and  strong  brand  and  geographic  presence  and  important strengths in transforming technologies. It also confirms and enhances the value of the existing Alliance and its potential to become even stronger in the future.


While there is no certainty that this proposal will result in a transaction, the Board of FCA has strongly supported and approved the proposal which will now be reviewed by the Groupe Renault Board of Directors. The definitive agreements for the proposed combination are subject to negotiation and to final review and approval by the FCA and Groupe Renault Boards.



Completion of the proposed combination would also be subject to customary closing conditions, including approval by each company's shareholders, as applicable, and the satisfaction of antitrust and other regulatory requirements.




- FCA also logo

Permanent-URL: http://www.automobilsport.com/fca-proposal-groupe-renault-global-automotive-group---191332.html

27.05.2019 / MaP

More News

Renaultís Board of Directors has decided to study with FCA the potential 50/50 merger
27.05.2019
Renault’s Board of Directors met today to examine the proposal received from FCA (Fiat Chrysler Automobiles) regarding a potential 50/50 merger between Renault S.A. and FCA.After careful review of the terms of FCA’s friendly proposal, more >>
Groupe Renault confirms receipt of a proposal from FCA regarding a potential 50/50 merger transaction
27.05.2019
Groupe Renault confirms that it received a proposal from FCA (Fiat Chrysler Automobiles) regarding a potential 50/50 merger transaction between Groupe Renault and FCA.Renault’s Board of Directors will meet this morning to discuss this proposal.- Groupe Renault - more >>
Large majority of Daimler shareholders approve new Group structure
24.05.2019
...with Daimler AG as parent company    Annual Meeting in Berlin with about 5,000 shareholders clears the way for legally independent entities for car and van business and for truck and bus business more >>
Personnel changes at Mercedes-Benz Cars
17.05.2019
    Nicholas Speeks will become new CEO of Mercedes-Benz USA and Head of Sales NAFTA Mercedes-Benz Cars.    Jan Madeja will be Head of the Chinese sales company for passenger cars, Beijing Mercedes-Benz Sales Service.    Holger Suffel will become CEO of Mercedes-Benz Russia and Head of Sales Mercedes-Benz C more >>
Harris Williams Advises RANDYS Worldwide Automotive on its Sale to Tailwind Capital
17.05.2019
Harris Williams, a global investment bank specializing in M&A advisory services, announces the sale of RANDYS Worldwide Automotive (RANDYS), a portfolio company of Linsalata Capital Partners, to Tailwind Capital (Tailwind). RANDYS is a leading supplier of highly engineered drivetrain products to the automotive aftermarket. The transaction, led by Joe more >>
Volkswagen delivers fewer vehicles in April
16.05.2019
Brand delivers 487,400 vehicles throughout the world: 6.2 percent fewer than in April 2018     Deliveries rise in North America, Russia and Brazil     In China, Volkswagen wins market shares in an overall market that continues to shrink     Sales Board Member Jürgen Stackmann: “ more >>
Nissan contributes -Ä56 million for first quarter 2019 to Renaultís earnings
14.05.2019
Nissan released today its results for the fourth quarter of fiscal year 2018/2019 (April 1, 2018 to March 31, 2019). Nissan’s results, published in JGAAP, for the fourth quarter of fiscal year 2018/2019 (January 1st to March 31th, 2019), after IFRS restatements, will have a negative contribution to Renault’s first quarter 2019 net income more >>
VW Shareholders formally approve actions of Board of Management and Supervisory Board and adopt resolution on increased dividend for 2018
14.05.2019
At the Annual General Meeting 2019, the shareholders of Volkswagen Aktiengesellschaft voted by a majority of 99.98 percent to approve the recommendation of the Board of Management and the Supervisory Board to pay a dividend of 4.80 (3.90) EUR per ordinary share and 4.86 (3.96) EUR per preferred share for fiscal year 2018. Approximately 2.4 billion (2.0 billion) EUR will therefore be distributed more >>
Volkswagen resumes preparations for IPO of TRATON SE
13.05.2019
Board member responsible for Finance and IT, Frank Witter: “We have always clearly reiterated our intention to pursue an IPO.”    TRATON CEO Andreas Renschler: “Our groundwork has been excellent and we are now fully focused on a potential IPO.” Backed by approval from the Supervisory Board, more >>
Mercedes-Benz sells about 182,000 vehicles worldwide in April
10.05.2019
EQC Edition 1886 (combined electric energy consumption: 20.8 – 19.7 kWh/100 km; combined CO2 emissions: 0 g/km)*. *Electric energy consumption and range have been determined on the basis of Regulation (EC) No. 692/2008. Electric energy consumption and range depend on the vehicle configuration. more >>
BMW Group's operational performance on course
07.05.2019
-  Recognition of provision for EU proceedings - Volume growth achieved despite prevailing sector trend – market share increased - Further rise in upfront expenditure for tomorrow’s mobility - Significant increase in Motorcycles segment EBIT - Good quarter for Financial Services segment - Electrified vehi more >>
AUDI AG: first quarter of 2019 still affected by adverse factors
03.05.2019
Audi Group: revenue of €13.8 billion; operating profit of €1.1 billion; operating return on sales of 8.0 percent        Key financials reflect deconsolidation of multi-brand import companies        CFO Alexander Seitz: “We are some distance away from our own targets and aim to make cons more >>
Kia Motors posts global sales of 227,773 units in April
02.05.2019
Kia Motors Corporation announced 227,773 units of global sales for April 2019, a 5.3 percent decrease compared to same period last year. Kia’s best-selling model was the Sportage SUV, with 41,395 units sold globally in April. S more >>
The Volkswagen Group boosts sales revenue and earnings in the first quarter 2019
02.05.2019
Volkswagen Group confirms 2019 targets for deliveries to customers, sales revenue and operating profit before special items    Deliveries to customers of the Volkswagen Group at 2.6 million vehicles (–2.8 percent)    Group sales revenue of EUR 60.0 billion exceeds prior-year figure by 3.1 percent    more >>
PwC welcomes Dr. Anil Khurana as the Global Industrial Manufacturing and Automotive Industry leader
29.04.2019
PwC welcomes the appointment of Dr. Anil Khurana as the Global Industrial Manufacturing and Automotive (IM&A) Industry Leader, based in the US.  A leading industry expert, Dr. Anil has advised companies, investors, and governments in the US, Europe, Middle East, and Asia on a range of topics such as corporate strategy, financing, public policy, innovation, entrepreneurship, internation more >>
Groupe Renault Revenues of Ä12.5 billion in the first quarter of 2019
26.04.2019
    Group sales decreased by 5.6% to 908,348 vehicles in a global market down 7.2%.    Group revenues amounted to €12,527 million in the quarter (-4.8%). At constant exchange rates and perimeter[1], the decrease would have been 2.7%.    The Group confirms its guidance for the year.  more >>
Benedikt Schell to become the new CEO of Mercedes-Benz Bank AG
25.04.2019
The Supervisory Board of Mercedes-Benz Bank AG has picked the successor for the CEO position. Franz Reiner (51), who will take over as chairman of Daimler Financial Services AG effective June 1, 2019, will be succeeded at the same time by Benedikt Schell (48) as the new CEO of Mercedes-Benz Bank. more >>
Mitsubishi Motors Philippines hits its One Million-Unit Sales in 2019
09.04.2019
Mitsubishi Motors Corporation (MMC) announced that Mitsubishi Motors Philippines Corporation (MMPC) hit its 1 million-unit sales milestone this year. The company has been logging various milestones in its historical books and this part more >>
Williams Reports 2018 Annual Results
05.04.2019
Williams Grand Prix Holdings PLC (WGPH, Ticker: WGF1) today announced the Group’s financial results for the year ended 31 December 2018. WGPH is the holding company of the Williams group of companies, which includes Williams Grand Prix Engineering Limited and Williams Advanced Engineering Limited.Group revenue increased in 2018 to £176.5m, from £166.2m more >>
Compensation of Mr.Carlos Ghosn for the 2018 financial year
04.04.2019
Following the resignation of Mr. Carlos Ghosn from his positions as Chairman of the Board of Directors and Chief Executive Officer on January 23, 2019, a meeting of the Board of Directors was held on April 3, 2019 to decide on the financial conditions of his departure.It is recalled that, on February 13, the Board of Directors had already waived Mr. Carlos Ghosn's non-co more >>
The brand has created a network of 210 CUPRA Corners
02.04.2019
   CUPRA has consolidated its structure by increasing its staff by 50%    Germany, Spain and the United Kingdom were its best performing markets in 2018    CUPRA has started 2019 by tripling sales and reaching 3,600 units sold more >>
New management at Volkswagen Group Components
27.03.2019
Heiner Lanze, new Head of Procurement    Frank Engel will in future be responsible for component activities in China    Christian Bleiel heads Component Production at ŠKODA    Andreas Salewsky becomes the new Head of the Salzgitter Plant more >>
Daimler AG planned new Group structure
22.03.2019
Supervisory Board and Board of Management of Daimler AG agree on future members of the Boards of Management and Supervisory Boards of Mercedes-Benz AG and Daimler Truck AG  &nb more >>
Erneute erfolgreiche Anleihenausgabe von Fastned
22.03.2019
Schnellladeunternehmen nimmt mehr als 10 Millionen Euro für den Ausbau des europäischen Schnellladennetzwerks auf. Fastned - das Ladeunternehmen, welches ein europäisches Netz von Schnellladestationen aufbaut - hat durch die Em more >>
BMW Group sets strategic course for future
20.03.2019
Krüger: "Systematically working to ensure operational excellence" - Operating efficiency: Performance > NEXT offers potential efficiencies in excess of € 12 billion by 2022 -  Upfront expenditure expected to remain high -  New structure for sales divisions -  EBIT margin of 8 to 10 per cent remains ambitio more >>
Porsche rewards employees for a highly successful 2018
20.03.2019
€9,700 bonus for Porsche employeesProfit-sharing at Porsche: After a record 2018 financial year for revenue, profits, and deliveries, a special bonus of up to €9.700 before tax is being paid to employees of the sports car manufacturer. This rewa more >>
Porsche in 2018: Inspiration, facts and figures
19.03.2019
New Annual and Sustainability Report featuring the work of star photographer Martin SchoellerPorsche AG is publishing its latest Annual and Sustainability Report to coincide with the announcement of its annual results. Economic, ecological more >>
Thierry Koskas appointed Senior Vice-President, Sales & Marketing at Groupe PSA
18.03.2019
Thierry Koskas has been appointed Senior Vice-President, Sales & Marketing at Groupe PSA, effective 26 March 2019. He will report to Carlos Tavares, Chairman of the Managing Board.The role of the Sales & Marketing Department is to boost the Group’s c more >>
BMW Group sets strategic course under challenging conditions
15.03.2019
Second-highest Group profit to date achieved -  EBT margin above target of 10 per cent -  Record research and development expenditure - More than ten new electrified models lined up -  EBIT margin in Automotive segment above 7 per cent - Second-highest dividend proposed - more >>
A strong year for Porsche: in pole position for electromobility
15.03.2019
Financial year 2018Success in a time of transformation: In the 2018 financial year, Porsche AG achieved new records for operating profit, sales revenue, deliveries, and headcount. The company’s operating profit grew by around 4% compared with the same period in more >>
Automobili Lamborghini reaches record highs in all key business figures 2018
14.03.2019
•    Turnover grows by 40% to 1.42 billion Euro•    Worldwide sales increase by 51% from 3,815 to 5,750 units•    Sustained, profitable growth path evidenced•    New Super SUV adding sales momentum to super sports cars,record sales performance across all regions: EMEA, Ame more >>
Audi accelerates its realignment - After significant adverse factors in 2018 financial year
14.03.2019
Operating profit before special items falls to €4.7 billion; Operating return on sales before special items of 7.9 percent        Financial base confirmed: €2.1 billion net cash flow; €20.4 billion net liquidity        Board of Management to reveal new strategy at 2019 Annual General Mee more >>
SEAT achieves the highest operating profit in its history
14.03.2019
    The carmaker earns 254 million euros in 2018, an increase of 33.4%    Turnover exceeds 10 billion euros and sets a new record    SEAT employees will receive an extra payment of 1,068 euros more >>
Volkswagen brand steps up pace of transformation
13.03.2019
2019 is key year: electric offensive set for launch, significant efficiency increases planned    Earnings improvement program to make sustained €5.9 billion contribution from 2023    Investment from 2019 to 2023 more >>
VW delivers fewer vehicles but gains market shares
13.03.2019
In February, worldwide deliveries fall by 2.2 percent compared with the previous year to 398,100 vehicles     Volkswagen wins market shares throughout the world in a shrinking overall market     Deliveries up in Germany, Europe and South America, and down in North America     Market share more >>
Volkswagen Group brands deliver a solid performance
12.03.2019
Volkswagen Passenger Cars brand delivers a record number of vehicles – earnings down, inter alia as a consequence of the changeover to WLTP    Audi turns in a solid performance despite WLTP challenges – Porsche, ŠKODA and SEAT post new records in deliveries to customers    Bentley and Volkswagen Commercial Vehicl more >>
Electronic components drive renewed growth in trade, in technology goods in 2017
11.03.2019
* Internet of Things propels exponential growth* The Republic of Korea becomes the second largest world exporter of information and communications technology goods, behind ChinaDemand for electronic components used in Internet-of-Things (IoT) devices drove the value of trade in international imports of information and communications tec more >>
PWC : New York, London and Hong Kong expected to remain as top listing destinations in 2030
11.03.2019
•    Exchanges in developed markets are proving to be resilient, benefitting from their recognised liquidity and stability•    Companies from China and India expected to dominate issuance in 2030, although growth of exchanges in more >>
BMW Group delivers over 171,000 vehicles in February
08.03.2019
- New BMW 3 Series sedan arriving in showrooms in March -  BMW i3 sales increase 20% in first two months of year Following sales growth in January, with the model changeover of the company’s bes more >>

2001-2019 automobilsport.com full copyright