MILAN (AP) — Fiat Chrysler's proposal to merge with French rival Renault has industry executives, analysts and union leaders rushing to figure out how it would reshape the sector worldwide.
A deal would create the third-largest automaker with annual sales of 8.7 million vehicles, behind Volkswagen and Toyota. It would be a bold step in the industry consolidation that many see as necessary in the capital-hungry sector, which Fiat Chrysler Automobiles says would create 5 billion euros ($5.6 billion) in savings.
Yet, while Renault has indicated it is open to talks, the plan faces hurdles and questions, including where savings - and perhaps even job cuts - will come from.
Here's a look at the proposed deal.
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WHAT'S NEXT
Fiat Chrysler made public its plan on Monday, and is awaiting a response from Renault. The Renault board met Monday to discuss what they termed "a friendly offer." The French government holds a 15% stake in Renault, and will have a say in the outcome.
Renault's board will hold a new meeting early next week to decide on whether to say yes or no to the proposal. A "yes" would open the way for a non-binding memorandum of understanding to open exclusive merger negotiations with Fiat Chrysler. The ensuing process would involve consultations with unions, the government, antitrust authorities in all relevant jurisdictions, as well as other regulators. It would take about a year.
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JAPANESE (TRI-)ANGLE
One particular impact a deal could have is on Renault's existing alliance with Japanese partners Nissan and Mitsubishi.
Questions over the future of that alliance have grown since the criminal investigation into the former head of Renault and Nissan, Carlos Ghosn, who denies wrongdoing. Ghosn intended to merge the two, but industry analyst Ferdinand...
