Renault, Fiat Chrysler Shares Surge on Merger Proposal
May 27 2019 - 3:01AM
Dow Jones News
By Olivia Bugault
Renault SA (RNO.FR) and Fiat Chrysler Automobiles NV (FCA.MI)
shares surged Monday morning after FCA unveiled its merger proposal
with France's Renault, a move that would create the world's
third-largest car maker by production.
At 0723GMT, shares in FCA are up 12% at EUR12.85 and Renault
trades 12.8% up at EUR56.31.
Fiat said that the combined business would be 50% owned by FCA
shareholders and 50% by the shareholders of Groupe Renault and
added that the majority of the board would be independent.
Fiat Chrysler fits well with Renault but a merger would also
face headwinds, said Jefferies. "We see many challenges, from deal
terms to restructuring and politics, but also very high
complementarity, from geographic positions to EU scale, segments
and LCVs," the brokerage said.
Citi analysts said that they prefer strong alliances rather than
complicated mergers, however, they expected both stocks to
positively react to this potential tie-up.
If the merger happens, it would create a car company with a
combined value of $37 billion and annual vehicle production of
almost nine million passenger cars.
Write to Olivia Bugault at olivia.bugault@dowjones.com
(END) Dow Jones Newswires
May 27, 2019 03:46 ET (07:46 GMT)
Copyright (c) 2019 Dow Jones & Company, Inc.
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