Renault’s board of directors delayed its decision on the Fiat Chrysler’s proposed deal, following Nissan’s resistance to the deal. The board of the French car maker will meet again for a second day to extend the discussions on the matter.
According to the official announcement, Renault’s board of directors “has decided to continue to study with interest the opportunity of such a combination and to extend the discussions on this subject”, meeting again today, Wednesday, June 5.
Citing a person familiar with the matter, Bloomberg reports that the board is examining in detail a preliminary agreement on the merger with FCA. The draft is taking into account requests from the French government, Renault’s biggest shareholder, for guarantees on jobs and corporate governance.
A possible payout for Renault investors is also under consideration, by reducing the proposed 2.5 billion-euro special dividend for FCA investors.
Fiat Chrysler’s proposal is about a 50-50 merger between the two car makers under a new Dutch holding company, targeting to add scale, cut costs and boost resources for all the brands involved. If the deal goes through, it would create the world’s third-largest car maker.
While Nissan cannot block the deal between Renault and FCA, the Japanese company’s representatives on Renault’s board could oppose the agreement but it would be mostly a symbolic blow.
Nissan however could use its strong presence in China and the rest of Asia, as well as its EV expertise as leverage in making Renault listen to their concerns.