by Eric J. Lyman
ROME, May 27 (Xinhua) -- Italy-United States carmaker Fiat-Chrysler said Monday it submitted a proposal to merge with French rival Renault, a move that, if approved, would create the world's third leading manufacturer of automobiles.
Fiat-Chrysler said the deal would be a true merger and not a case of one company taking over the other -- shareholders of the two companies would each own half of the combined entity, with most members of the board of directors having no ties to either company.
If approved by both sides, the combined company would produce 8.7 million cars per year, and would have a significant presence in every market segment from small and mainstream vehicles to luxury vehicles and trucks. Fiat said the merger plan would not include any plant shutdowns.
As separate companies, Fiat-Chrysler Automobiles is the world's eighth largest carmaker, with an annual production of 4.6 million vehicles. Renault is one spot lower in ninth, with an annual production of 4.1 million vehicles.
Combined, the companies would jump to third, just ahead of South Korea's Hyundai-Kia and General Motors from the United States, and behind only Japan's Toyota and Volkswagen from Germany.
Fiat-Chrysler is itself the product of a major merger, from 2014, when Italy's Fiat merged with Chrysler in the United States.
Financial markets applauded the proposed deal, with Fiat-Chrysler shares jumping 20 percent on the Italian Stock Exchange in Milan in early trading Monday. Renault shares, meanwhile, were up 18 percent on the Paris Stock Exchange.
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