The French carmaker Renault on Monday said it was considering a proposal by Fiat Chrysler to merge and form a global partnership aimed at improving their chances of surviving the coming perilous and costly shift to electric and self-driving cars.

If the proposal goes forward, the new company would displace General Motors as the third-largest car company in the world, behind Volkswagen and Toyota, and significantly change the balance of power in the global auto industry.

Under Fiat’s proposal, shareholders of both companies would receive 50% of the new company. The combination would have a total value on the stock market of $39 billion.

There is a consensus among industry executives and analysts that carmakers must link up to share the cost of a transition from internal combustion engines to avoid being run over by fast-moving tech industry challengers like Tesla or Uber. A Fiat-Renault deal would put pressure on rivals to find partners or be left behind as competitors unite in new mega-alliances.

Proposing a full-blown merger illustrates the urgency that automakers feel as they stand on the brink of what may be the biggest period of transition since the early days of the automobile.

A union of Fiat Chrysler and Renault could also destabilize the French company’s longtime alliance with Nissan of Japan, which is already troubled. A Nissan spokesman on Monday declined to comment. Fiat’s proposal is certain to be a topic when the alliance’s board meets in Tokyo on Wednesday and the announcement was planned so Renault would be free to discuss it openly with Nissan.

Fiat Chrysler Automobiles said in a statement that it was motivated by “the need to take bold decisions to capture at scale the opportunities created by the transformation of the auto industry in areas like connectivity, electrification and autonomous driving.”

Renault said Monday that its board would consider Fiat’s “friendly proposal.”

A spokesman for Fiat Chrysler said there had been no decision on a name for the merged company, nor a decision on a chief executive.

Investors cheered the merger proposal. Renault shares soared almost 14% in Paris trading while Fiat Chrysler shares rose more than 10% in Milan.

Still, the lesson from past auto mergers is that they often founder on clashing corporate cultures or turf battles and that predictions of the possible benefits prove overly optimistic. That was the case with Chrysler’s ill-fated merger with Daimler in the late 1990s.

This deal would be particularly tricky because it will inevitably draw the attention of political leaders in Italy and France, who will fight to preserve as many jobs as possible. The French government is Renault’s largest shareholder.

By purchasing parts together, combining their manufacturing operations and sharing the cost of research and development, the partnership would eventually save $5.6 billion per year, Fiat said. At the same time, Fiat said, the deal would not result in any plant closings.

The merger “would create new opportunities for employees of both companies and for other key stakeholders,” Fiat said.

It is hard to see how Fiat and Renault would be able to avoid job cuts, though, when their factories are operating below capacity and the European auto industry is suffering a downturn.

The French government signaled that it would back Fiat’s plan as long as jobs and industrial sites in France are not compromised. But the powerful CGT labor union at Renault lashed out at the proposal Monday, saying it gave Fiat the power to favor operations in Italy over France because the French government would no longer have a representative on the new board. At least 22,000 jobs have been shed at Renault in France since 2005, the CGT added.

“Nothing would prevent the Italian shareholder from favoring its national base,” the union said in a statement, noting that it learned about the talks only through the media. “The CGT considers that there is nothing good to expect from a Renault FCA merger.”

Matteo Salvini, Italy’s deputy prime minister and leader of the country’s League party, cheered the merger proposal. “Fiat Chrysler expanding is good news for Italy,” he said. “I count on it being a brilliant operation that preserves every single job while creating a European car industry giant.”

Fiat Chrysler and Renault each have things to offer to partly address each other’s weaknesses. Renault and Nissan were among the first car companies to build electric vehicles for mass production, whereas Fiat is seen as a laggard. Together, the companies sold 8.7 million vehicles last year, ahead of GM, which sold 8.4 million.

Fiat Chrysler offers Renault access to the U.S. market, where the French have no presence. Their model lineups complement each other fairly well, with Fiat Chrysler strong in SUVs like the Jeep Cherokee as well as the Ram pickup truck line. Renault has a broader palette of passenger cars like the compact Mégane or subcompact Clio.

“Putting FCA and Renault together could make sense,” said Ferdinand Dudenhöffer, a professor at the University of Duisburg-Essen in Germany who is a prominent commentator on the car industry.

Neither company is strong in China, which has become the world’s largest car market. And neither is strong in the high end of the car market, the most profitable segment. Fiat’s Alfa Romeo and Maserati brands are well-regarded but are minor players in a market dominated by Mercedes-Benz, BMW and Audi.

One unanswered question was how the proposed merger would fit in with Renault’s partnership with Nissan and Mitsubishi, known as the Renault Nissan Alliance. Fiat said the new company would continue to work with Nissan and that the Japanese company would receive one seat on the 11-person board of directors.

Together, the four companies would be by far the largest carmaker in the world, with sales of 15 million vehicles a year and a major presence in virtually every corner of the planet. But such a monstrous corporation would be complex and even more difficult to manage than the Renault Nissan Alliance has been.

Under Fiat’s proposal, shareholders of Fiat Chrysler would share a dividend $2.8 billion that reflects the company’s higher value on the stock market.