Fiat Chrysler has made a “transformative” merger proposal for French carmaker Renault, the Italian firm said on Monday.
The combined business would be 50% owned by Fiat shareholders and 50% by Renault stockholders.
The carmaker said the tie-up would create a global automotive leader, with 8.7 million vehicle sales.
Carmakers have faced pressure to consolidate amid major industry shifts, including towards electric vehicles.
In a statement, Fiat said the planned merger would create a “world leader in the rapidly changing automotive industry with a strong position in transforming technologies, including electrification and autonomous driving”.
No plant closures would be caused as a result of the tie-up, the carmaker said.
Fiat said that if the firms’ 2018 financial results were totted up, the combined company’s annual revenues would be nearly €170bn (£149.6bn; $190.5bn), with operating profit of more than €10bn and net profit of more than €8bn.
Industry shifts toward electric models, along with stricter emissions standards and the development of new technologies for autonomous vehicles, have put increasing pressure on carmakers to consolidate.