FCA And Renault May Resume Merger Talks If Nissan Backs The Deal

Fiat Chrysler Automobiles and Renault are allegedly looking to revive talks about a potential merger.

Reuters reports that Nissan wants Renault to significantly reduce its 43.4 per cent stake in the Japanese car manufacturer in return for its support of a $35 billion merger between FCA and Renault.

FCA officially presented its merger plan to Renault on May 27 and discussions were being held regarding the deal. However, the Italian-American automaker abruptly withdrew its offer for a merger in the early hours of June 6 citing France’s current political situation. It was later revealed that the French government had blocked a vote by Renault’s board on the matter in a bid to win Nissan’s backing for the deal.

Also Read: French Government Denies Blame For Collapsed Renault-FCA Merger Proposal

Sources within the Alliance claim FCA chairman John Elkann and Renault chairman Jean-Dominique Senard have held talks about continuing the negotiation, but both companies are refusing to comment on the reports officially.

It is believed that a senior advisor from FCA on the Renault merger bid, Toby Myerson, was at Nissan headquarters in Yokohama, Japan on Monday for discussions with top management, likely including Nissan chief executive Hiroto Saikawa.

Saikawa has long argued that its alliance with Renault needs “re-balancing”. Nissan is far larger than Renault but it only holds a 15 per cent stake in the French automaker and no voting rights, while Renault controls 43.4 per cent of Nissan – something the Japanese definitely think needs to be re-adjusted…

Shortly after the proposal collapsed last week, the French government said it was willing to reduce its 15 per cent stake in Renault in an effort to see the merger come to fruition, but only if that would benefit both the automaker and the Alliance in general.

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  • Craig

    I’m starting to get dizzy.

  • designer_dick

    If Renault was being serious and intended to go about the rebalancing of the Alliance in good faith, it would offer to reduce its shareholding in Nissan to 15%, and extend Nissan voting rights on its 15% share of Renault. Unfortunately, as long as the French government remains a large shareholder in Renault, that is unlikely to happen – Macron and his advisers will doggedly resist any and all moves aimed at bringing equality to the relationship between the two companies.

    • Stephen G

      What makes you say that? Rumor is the French Government only wanted Nissan to have a voice and Nissan said they don’t care.

      • designer_dick

        What makes me say that? Maybe the fact that they enacted a law several years ago that effectively doubled voting rights for long-term shareholders in French companies. Companies that wished to opt out were allowed to do so, but in order to stop Renault from doing that, the French government spent €1.2bn euros to temporarily increase their share to 23%, which gave them enough clout to block a shareholder vote on the issue.

        • Stephen G

          That’s not entirely true. The laws were already in existence. They were not enacted for some government coop but were there for any long term shareholder to take advantage of. Any smart shareholder would take advantage of such if given the opportunity. The Government purchase in April 2015 of addition stock (boosting holdings to near 20%) was reversed in November 2017 back to 15% through a Renault repurchase. It is not uncommon for major shareholders to push their weight around, it happens all the time, too many people with too many agendas. I believe it’s quite noble for a Government to support the corporations within in borders, of course like any other shareholder their probably in it for the money.

  • Mr. EP9

    Not happening.

  • Сафиуллина-Мохамед Рамазанов

    So all what I said was right

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