In a deal that would create the world’s third-biggest carmaker Fiat Chrysler Automobiles NV on Monday proposed a merger with Renault SA.

The transaction will be structured as a 50-50 ownership through a Dutch holding company, Fiat said in a statement, adding that there will be no plant closures. In a separate statement, the French carmaker said its board would meet later in the morning to discuss the proposal.

The talks come as automakers worldwide face intense pressure to spend heavily on new technologies and adapt to trends such as car-sharing. Falling sales in the world’s biggest markets — China, the U.S. and Europe — have brought fresh urgency to consolidate. Fiat and Renault expect their joint “synergies” to amount to more than €5 billion ($5.6 billion), coming from areas such as purchasing power.

Together, Renault and Fiat had a combined market value of €32.6 billion ($36.5 billion) as of Friday.

Fiat and Renault have moved ahead without the French carmaker’s 20-year partner, Nissan Motor Co., and Mitsubishi Motors Corp., the other member of their three-way alliance. Both Fiat and Renault went through dramatic changes at the top last year after former Fiat chief Sergio Marchionne died and Carlos Ghosn, who was chairman of the Franco-Japanese alliance, was arrested in Tokyo in November over alleged financial misdeeds.

Together, the two companies made about 8.7 million cars last year, which would vault the pair past South Korea’s Hyundai Motor Group and Detroit’s General Motors Co. That is still behind the world’s two biggest automakers, Volkswagen AG and Toyota Motor Corp., who both topped 10 million vehicles last year. Renault’s existing alliance, including numbers from partners Nissan and Mitsubishi, also reached this milestone.

Adding Fiat and Renault, along with its Japanese partners, would bring the total to more than 15 million vehicles a year, with a strong presence in all major markets and premium brands like Jeep, Maserati, Alfa Romeo and Infiniti under a common umbrella.

Fiat and Renault would have a “broad and complementary brand portfolio” covering markets from luxury to mainstream, the Italian company said in its statement.

With sales falling in the world’s biggest car markets, manufacturers are being pushed by regulators to electrify and reduce fleet emissions. They’ve also been forced to spend heavily on self-driving technology or risk getting left behind by new, deep-pocketed competitors like Alphabet Inc.’s Waymo.

A Fiat-Renault agreement would hold the potential for extensive cost savings in Europe — both through sharing investments and reducing costs in the struggling market. Almost one-third of Fiat’s global workforce of 198,500 was located in the region at the end of last year, even though the company makes almost all of its profit in North America. Renault, which is 15 percent owned by the French government, counts on Europe for almost half its sales.

Together, the two companies made about 8.7 million cars last year, which would vault the pair past South Korea’s Hyundai Motor Co. and Detroit’s General Motors Co. The world’s two biggest automakers, Volkswagen AG and Toyota Motor Corp., each topped 10 million vehicles last year. Renault, with alliance partners Nissan and Mitsubishi, also reached that level.

Fiat would give Renault access to the North American market, while gaining clout in Russia, the French carmaker’s second-biggest market with its Avtovaz unit. Overall, Renault deliveries fell 5.6 percent to 908,348 vehicles in the first quarter, while Fiat Chrysler sales were down 14 percent to 1.04 million cars and light trucks.

Fiat also held initial talks with Peugeot owner PSA Group as it evaluates potential partners, the people said. PSA remains open to “opportunities that would create value on a long-term basis,” it said in an email.

Falling sales in the three major regions — China, the U.S. and Europe — have brought fresh urgency to the cause of consolidation championed for years by Marchionne and deposed Renault-Nissan alliance boss Ghosn.

Fiat has been seeking a partner in recent months, with talks focused on Renault and PSA. Elkann and CEO Mike Manley have made several trips to Paris since the beginning of the year for business meetings as part of their search for ways to make the carmaker stronger, the people said.

Renault has been trying to firm up its two-decade alliance with Nissan, which was shaken by Ghosn’s arrest.

His departure led to tensions between the partners being brought into the open, with Nissan executives resisting new proposals by Renault to cement ties through the creation of a holding-company structure.

Renault owns 43 percent of Nissan — the bigger partner — which in turn owns 15 percent of Renault, with no voting rights. A 2015 agreement granted Nissan guarantees preventing Renault from interfering in its governance, a move the Japanese carmaker considered necessary because the French government is Renault’s most powerful shareholder.

The French government has been kept abreast of talks between Renault and Fiat Chrysler and will consider the impact of any proposed tie-up in terms of jobs, industrial footprint and valuation, according to a person familiar with the matter. French officials would prefer a deal that strengthens the existing Renault alliance by bringing in Fiat, and at worst a deal with the Italian-American carmaker would have to be alliance-neutral, the person said.

Relations between Nissan and Renault had steadied in recent weeks, with the appointment of Renault CEO Thierry Bollore to the board of its Japanese partner, and the reappointment of Nissan CEO Hiroto Saikawa, who opposes a merger with Renault. Still, a Renault deal with Fiat would put pressure on Nissan, while potentially making the resulting entity more formidable.

Together, Renault, Nissan and Mitsubishi sold 10.76 million passenger cars and light trucks last year. Joining Fiat with the French and Japanese partners would bring the total to more than 15 million vehicles a year, with a strong presence in all major markets and premium brands like Jeep, Maserati, Alfa Romeo and Infiniti under a common umbrella.

Renault’s partnership with Nissan was thrust into the spotlight in November with the arrest of Ghosn, the chairman and architect of the global car-making alliance.

In the aftermath, Nissan CEO Saikawa has sought to pull back from Europe and North America, where he contends the Japanese company has sacrificed profit for volume.

Fiat Chrysler has been looking for a tie-up since Marchionne created the Italian-American carmaker in 2014. A year later, Marchionne became vocal on the auto industry’s need for consolidation in an analyst presentation called “Confessions of a Capital Junkie.”

Marchionne argued then that carmakers waste €2 billion ($2.24 billion) a week by duplicating investments they could share. At the time, Renault-Nissan was considered the second-best fit for Fiat after General Motors Co., according to people familiar with the plan. GM rebuffed Fiat’s approaches.

Other carmakers are also looking to each other for savings.

BMW AG and Daimler AG have pushed aside rivalries to join forces in sharing services and autonomous cars. VW has been in talks with Ford Motor Co. to team up on e-cars and autonomous vehicles.

Fiat has a history with French President Emmanuel Macron, whose support will be needed along with that of Italian officials for a deal that could involve major job cuts in France and Italy.

In 2013 Macron, then a top adviser to President Francois Hollande, had preliminary talks with Fiat about a merger with troubled Peugeot.

Bloomberg reported in April that Fiat and PSA were discussing a “superplatform” — the underpinning of a car model — as part of a partnership to share investments. While PSA remains open to deals, based on 2018’s financial results, “there is no hurry to finalize any partnership,” according to an emailed statement.