Fiat Chrysler Automobiles has proposed a €32.6bn all-share merger with Renault, a deal that would reshape the global automotive industry and inject fresh life into the French carmaker’s alliance with Japan’s Nissan.

The proposal for a “transformative merger” would see FCA and Renault each own 50 per cent of the business, which would have combined sales of 8.7m vehicles a year — larger than General Motors and third globally behind Volkswagen and Toyota.

The combined group would have nearly €170bn in annual revenue on operating profit of more than €10bn, and net profit exceeding €8bn, FCA said. It would have a large presence in North America as well as Europe and Latin America, and expertise stretching from small electric vehicles to pick-up trucks.