Mubasher: Two of the world’s largest automakers Fiat Chrysler and Renault are considering a merger to develop the next generation of automobiles by establishing the world’s third largest automaker, CNBC reported.

The merger would be 50/50 between shareholders of Fiat Chrysler Automobiles and Groupe Renault, CNBC concluded, according to a statement from Fiat Chrysler.

Furthermore, a board of governors would hold a majority of independent directors.

The merger is not sealed yet and still requires approval by the boards of both Fiat Chrysler and Renault.

Once the merger is completed, the joint entity would produce estimated sales of 8.7 million vehicles each year and would be then considered the world’s third largest car manufacturer.

The combined organisation would generate savings of EUR 5 billion ($5.6 billion) on an annual basis and be “carried out as a merger transaction under a Dutch parent company,” Fiat Chrysler added, according to CNBC.

“Fiat Chrysler’s partnership with Renault is completely separate from the Nissan-Renault-Mitsubishi alliance,” CNBC said.

In 2018, Fiat Chrysler achieved sales of 4.85 million vehicles across the globe, with the vast majority being sold in North America. Meanwhile, Renault’s sales reached 3.81 million vehicles last year, with most of its business being in Europe.