Fiat Chrysler (FCA) wants to merge with French automaker Renault.
The automaker submitted a proposal Monday morning to join forces and save both companies billions of dollars as the industry transitions to electric and autonomous cars.
FCA said the merged company would be the world's third largest automaker and be 50 per cent owned by Fiat Chrysler shareholders and 50 per cent by Renault shareholders.
The companies have been in discussions for weeks to identify products and geographies where they could collaborate, particularly as they develop and commercialize new technologies.
FCA said joining forces would make the automakers a global leader in electric vehicle technologies, premium brands, SUVs, pickup trucks and light commercial vehicles and would have a broader and more balanced global presence than either company on a standalone basis.
"Combination would create the third largest global OEM with 8.7 million vehicle sales and a strong market presence in key regions and vehicle segments," said FCA in a statement released Monday morning.
FCA said there will be no plant closures as a result of the consolidation.
The automaker said the collaboration would substantially improve capital efficiency for common global vehicle platforms, architectures, powertrains, and technologies and speed up product development.
"FCA’s board strongly believes that this combination, which would have the scale, expertise and resources to navigate the rapidly changing automotive industry, would create new opportunities for employees of both companies and for other key stakeholders," FCA added.
FCA estimates savings can be achieved by reducing the combined number of vehicle platforms by approximately 20 per cent and engine families by approximately 30 per cent.
The merger is still subject to negotiation and to final review and approval by the FCA and Renault Boards. FCA Canada said it is too early to discuss potential impacts and outcomes.
"We have submitted a proposal and now await Renault's response," FCA Canada said. "In the meantime, our programs and five-year plan continue as normal."
Renault has a strong presence across Europe, Russia, Africa and the Middle East, while FCA is positioned in the high margin segments in North America and is a market leader in Latin America.
