American-Italian carmaker Fiat Chrysler has made an all share merger proposal to French rival Renault as part of a new wave of auto industry consolidation. Together they would have a combined market capitalisation of more than 32 billion euros ($36 billion) and total global sales of 8.7 million vehicles. By comparison, Volkswagen Group , delivered 10.9 million vehicles in 2018.
Including Nissan, which has an existing partnership with Renault, the alliance could become the world’s No.1 carmaker with 13.8 million in annual sales. It would also maintain a foothold in China, where both Fiat Chrysler and Renault are marginal players.
A deal would be the fourth time in 20 years that the former Chrysler Corp of Detroit would have transferred to new owners, and the fifth time since 1987 that the Jeep sport utility vehicle brand would have changed hands. Here’s a timeline:
1987 – Chrysler, under Lee Iacocca, agrees to buy Renault’s 46% stake in Jeep parent American Motors Corp (AMC), and later acquires all of AMC and begins expanding the Jeep brand. 1998 – German automaker Daimler AG and Chrysler announce a “merger of equals,” which soon becomes a Daimler takeover. The blockbuster deal sours as the US auto market slows.
2004 – Sergio Marchionne takes over as chief executive of Fiat.
2007 – Daimler CEO Dieter Zetsche, former head of the Chrysler unit, agrees to sell 80% of Chrysler to Cerberus Capital Management, a US financial investor. The deal goes through even though Cerberus had to postpone the sale of a $12 billion syndicated loan after investors balked.
2009 – Chrysler enters bankruptcy restructuring, and in June 2009, Fiat takes control of the company, which is renamed Fiat Chrysler Automobiles NV (FCA).
January 2014 – Fiat, under Marchionne’s leadership, tightens its grip on Chrysler Group LLC by buying the 41.46% stake it does not already own in a $4.35 billion deal.
April 2015 – The French state increases its Renault stake to 19.74% from 15% in a deal designed to block efforts by Nissan to increase its influence over Renault. The deal is orchestrated by economy minister – and now French president – Emmanuel Macron.
April 2015 – Marchionne releases “Confessions of a Capital Junkie,” a treatise on why consolidation is inevitable for the auto industry in a time of tightening emissions regulation and global competition.
September 2015 – Marchionne emails General Motors chief executive Mary Barra asking her to explore a combination of the two carmakers and is rebuffed.
July 2018 – Fiat Chrysler reveals Marchionne died from complications in the wake of surgery. Marchionne’s successor Mike Manley announces a heavy fall in profit and a commitment to delivering the 2022 strategy of making FCA “strong and independent”, while staying flexible about any deal opportunities.
January 2019 – Renault says Carlos Ghosn has resigned as chairman and CEO while he faces a financial misconduct probe. March 2019 – Manley says Fiat Chrysler is open to pursuing alliances and merger opportunities, adding FCA is not engaged in any merger talks.
May 2019 – Fiat Chrysler and Renault announce a proposal to merge, with each company’s shareholders controlling 50% of the new entity.