In a deal that would create the world's third-biggest carmaker Fiat Chrysler Automobiles NV on Monday proposed a merger with Renault SA.
The transaction will be structured as a 50-50 ownership through a Dutch holding company, Fiat said in a statement, adding that there will be no plant closures. In a separate statement, the French carmaker said its board would meet later in the morning to discuss the proposal.
The talks come as automakers worldwide face intense pressure to spend heavily on new technologies and adapt to trends such as car-sharing. Falling sales in the world's biggest markets — China, the U.S. and Europe — have brought fresh urgency to consolidate. Fiat and Renault expect their joint "synergies" to amount to more than €5 billion ($5.6 billion), coming from areas such as purchasing power.