PARIS: The board of French car giant Renault is expected to decide on Tuesday to begin merger talks with Fiat Chrysler that could create a new global giant spanning the United States, Europe and Japan.

US-Italian group Fiat Chrysler proposed a “merger of equals” with Renault last week which has been welcomed by financial markets and has been given a conditional green light by the French government.

A merger would be “a real opportunity for the French auto industry,” Finance Minister Bruno Le Maire told AFP Friday of a tie-up which would bring together the flagship brands as well as Alfa Romeo, Jeep, Maserati, Dacia and Lada.

After preliminary talks over the past week, Renault directors are to meet Tuesday and decide whether to enter into formal discussions, with talks continuing late Monday night to win over the Paris government.

If combined, the two firms would produce 8.7 million vehicles a year, creating an industry powerhouse with an expected market value of some 36 billion euros ($40bn).

But Renault already has an alliance with Japan’s Nissan and Mitsubishi, and the combined mega-group would be by far the world’s biggest, selling some 15m vehicles, surpassing Volksw­agen and Toyota, which sell around 10.6m each.

Nissan, a long-time Renault partner, fears being sidelined by the deal and its chief executive, Hiroto Saikawa, warned Monday that a merger “would significantly alter the structure of our partner.”

Any new combination would require a “fundamental review” of their relationship, said the boss of Nissan, whose 15 per cent stake in Renault would be diluted to 7.5pc under the proposed deal.

Published in Dawn, June 5th, 2019