PARIS/TOKYO -- Fiat Chrysler Automobiles, an Italian-American multinational carmaker, said Monday that it has proposed combining its operations with those of French automaker Renault, a move that would underscore the industry's rapid evolution in recent years.
FCA said the combined business would be 50% owned by FCA shareholders and 50% by those of Renault, and create synergies worth more than 5 billion euros ($5.6 billion) a year. It proposes a board initially made up of 11 members, with four members each for both FCA and Renault, and one from Renault alliance partner Nissan Motor.
"The proposed combination would create a global automaker, pre-eminent in terms of revenue, volumes, profitability and technology," FCA said in a news release. "The combined business would sell approximately 8.7 million vehicles annually ... and would have a broader and more balanced global presence than either company on a stand-alone basis," the statement said.
The merger would not involve any plant closures and would enable more capital efficient investment in common global vehicle platforms and technologies, FCA added.
Renault, which leads its own alliance with Nissan and Mitsubishi Motors of Japan, confirmed in a separate statement that it had received the proposal.
"Renault's board of directors will meet this morning to discuss this proposal. A press release will be issued following this meeting," Renault said.
A three-way merger would create a huge global automotive alliance with sales of 15 million cars a year, including those of Nissan and Mitsubishi.
Nissan president and CEO Hiroto Saikawa has so far declined to comment on the mooted deal, which was first reported by the Financial Times. "I'm open to any forward-looking discussions to strengthen the alliance, Saikawa told reporters on Monday.
He added that the top management of Renault, Nissan and Mitsubishi will meet in Yokohama, southwest of Tokyo, later this week, and that he intends "to exchange opinions openly and have a constructive dialogue."
Asked by reporters whether he was notified of the merger proposal, Saikawa was coy, saying, "I can't tell you, but I will tell you when I can."
The French automaker owns 43% of Nissan, while the Japanese company holds only a 15% nonvoting stake in Renault. Nissan so far has rebuffed its French partner's push to tighten their partnership, believing it makes outsize contributions to the alliance.
Both Renault and FCA have roots in Europe and their merger would provide the scale needed to raise profit margins and invest in the development of self-driving and electric cars.
FCA, the maker of Jeep, Maserati and Alfa Romeo cars, sold 4.84 million vehicles worldwide last year, compared with Renault's 3.88 million autos. It relies heavily on sales in North America, through its Chrysler unit. A merger with Renault, which makes most of its money in Europe, would complement both carmakers geographically. FCA cold also use the deal to forge a closer relationship with Nissan and Mitsubishi, helping it make further inroads in Asia, where it has a limited presence.
A merger also would benefit both carmakers in terms of production and investment in new areas such as artificial intelligence and electric vehicles.
The development of connected, autonomous, shared and electric cars, which are considered keys to the industry's future, is extremely capital intensive. Automakers are increasingly pairing up to eliminate overlapping investments.