Renault is considering a merger with Fiat Chrysler, a deal that would reshape the global auto industry and help the carmakers compete in the race for electric and self-driving vehicles.

The French automaker said on Monday that it would “study with interest” a proposal from Fiat Chrysler that would give its shareholders 50 percent ownership of a combined business with annual vehicle sales of 8.7 million.

If completed, the merger would create the world’s third largest carmaker behind Volkswagen and Toyota. General Motors would fall to fourth in the global rankings.

Renault stock surged more than 15 percent in Paris on Monday, while Fiat Chrysler shares jumped around 11 percent in Milan.

The companies had been discussing ways to cooperate on products and new technologies, but Fiat Chrysler said in a statement outlining its proposal that more could be gained from a merger.

“These discussions made clear that broader collaboration through a combination would substantially improve capital efficiency and the speed of product development,” the Italian-American company said.

Fiat Chrysler owns brands including Jeep, Dodge, Alfa Romeo and Maserati. Among its top markets is North America, where Renault does not have a significant presence.

The proposal is the latest example of established automakers seeking partnerships to share the costs of developing new technologies including electric vehicles and autonomous driving systems.

German carmakers BMW and Daimler have formed a joint venture that will develop ride-sharing and charging services. Ford and Volkswagen are working together to develop some new vehicles.

The trend toward cooperation has accelerated in recent months as carmakers more under increased pressure from electric-car upstarts like Tesla and tech companies including Uber.

Fiat Chrysler said a merger with Renault would produce annual cost savings of more than €5 billion. The company said no plants would be closed as a result of a merger.

Renault is already a member of the world’s biggest automotive alliance with Japanese carmakers Nissan and Mitsubishi Motors.

It’s not clear how a merger with Fiat Chrysler would affect that alliance, which was thrown into turmoil following the arrest last year of its former leader Carlos Ghosn.

Renault holds a 43.5 percent stake in Nissan, while Nissan owns 15 percent of Renault. The French carmaker, which sells fewer cars than its Japanese partner, had been pushing for the companies to merge but was rebuffed.

While the relationship between Nissan and Renault has been strained following Ghosn’s arrest, adding Fiat Chrysler would increase the alliance’s annual vehicle sales to 15 million.

Renault and Fiat Chrysler both said Monday that a merger would benefit the alliance. Nissan declined to comment. Representatives of Mitsubishi Motors were not immediately available.

Regulators are likely to scrutinize any deal between Fiat Chrysler and Renault. Yet the French government, which owns 15 percent of Renault, indicated Monday that it would support a merger.

“We have large companies which have been built outside of Europe, and today we need big companies to be built within Europe,” Sibeth Ndiaye, a spokesperson for the French government, told BFMTV.