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France says planned Renault-Fiat merger must protect jobs

France says planned Renault-Fiat merger must protect jobs

Fiat Chrysler proposed on Monday to merge with France's Renault to create the world's third-biggest automaker, worth $40 billion, and combine forces in the race to make electric and autonomous vehicles.

Nissan Motor Co., welcomes a possible merger between Fiat Chrysler Automobiles NV and Renault SA, Hiroto Saikawa, president and chief executive officer of the Japanese automaker, said Monday.

Should Renault say yes to the deal, the resulting behemoth would become the third largest auto manufacturer in the world, with combined sales of around 8.7 million vehicles annually.

Nissan, which is 43.4 percent-owned by Renault, would be invited to nominate a director to the 11-member board of the new combined company, under the plan presented on Monday.

According to FCA's release, if successful, the collaboration would create the world's third largest carmaker with the potential to achieve 8.7m vehicle sales globally.

FCA and Renault have moved ahead without Nissan, the French automaker's 20-year partner, which has resisted proposals by Renault to merge in a holding-company structure. "We need giants to be built in Europe".

For his part, Reuters notes that the pressure for consolidation among carmakers is rising in view of the challenges of electrification, the tightening of emission regulations and expensive new technologies developed for standard and stand-alone vehicles. "I want this deal to take place within the framework of the alliance between Renault and Nissan", he said.

But investors were enthusiastic about Fiat Chrysler's plan, pushing the company's shares up 8 per cent and Renault's 12 per cent.

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It said the merger could "improve Renault's industrial footprint and be a generator of additional value for the alliance" with Japan's Nissan and Mitsubishi.

Ghosn's removal from the helm of the Franco-Japanese partnership brought simmering tensions to the surface, with Nissan so far rejecting a French push for a merger.

If all firms were brought together, they would be producing almost 16 million cars per year, well ahead of Toyota and Volkswagen which both sell around 10.6 million. 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.

Fiat Chrysler employs about 180 people at its research and development centre at the University of Windsor, along with 300 people at a casting plant in Etobicoke, Ont., and controls three facilities in Ontario under the CpK Interior Products banner.

A French official said Sunday that the state will only agree to a merger if it makes sense for jobs and France's national interests.

Le Maire added the French government would seek four guarantees in exchange for backing a deal that would see its 15% stake in Renault reduced to 7.5% of the combined entity.

"Renault's top priority is now FCA", said Takada.