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Fiat Chrysler Set to Propose a Merger With Renault


Sergio Marchionne, the former chief executive of Fiat Chrysler who died last year, may have set the path for the planned merger in late 2015. He wrote in a PowerPoint presentation for financial analysts that the automobile industry was spending too much money developing and manufacturing cars, and he called for consolidation.

The spending by so many manufacturers, he said, “is duplicative, does not deliver real value to consumers and is pure economic waste.”

Renault and Fiat have been negotiating for several weeks over a “possible rapprochement” to collaborate on electric cars, autonomous and connected vehicles, and “new uses of the automobile,” said a French government official with knowledge of the situation, who spoke on the condition of anonymity because a proposal had not yet been made public.

The Renault chief executive, Jean-Dominique Senard, who replaced Mr. Ghosn in January as Renault’s chairman, informed the French finance minister, Bruno Le Maire, at a meeting on Friday that a proposal would be made to the Renault board in the coming days. The Japanese authorities were also informed, the government official said. Renault directors are expected to consider the plan during a board meeting at 8 a.m. Monday in Paris.

The French state is Renault’s largest shareholder, with a 15 percent stake, giving it sway over major decisions at the company as well as within the alliance with Nissan and Mitsubishi. The government isn’t opposed to a tie-up that could make the alliance the leading maker of electric cars and technologies to shape the future of the global auto industry, the official said.

Nonetheless, Fiat and Renault will need to make commitments to maintain jobs as well as industrial sites in France for the government to sign off, the official said. Any merger would need to be achieved within the framework of the alliance with Nissan and Mitsubishi “in order to strengthen it,” the official added.

Fiat Chrysler intends to say in its formal proposal that it will not close plants or cut jobs, the two people involved in the talks said. Such pledges are often difficult to keep in the long term.

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