The proposed merger between two car giants – Renault-Nissan-Mitsubishi and Fiat Chrysler Automobiles – went nowhere earlier this year, but the door to the deal never fully swung. According to a report in the Wall Street Journal sources claim that conversations are underway to revive the romance.
The FCA snapped its offer in June after the French government, which owns 15 percent of Renault, entered discussions, citing a need to have Nissan alliance partner fully on board. The Japanese carmaker, shrouded in scandal and a severe economic downturn, shied away from the earlier talks, and offered polite but not enthusiastic public support when reports emerged of concerns about its autonomy and shrinking influence during such a marriage.
To get the deal back on track, Renault would need to loosen the ties of Nissan.
According to the report [WSJ from Nissan wants to equalize the skewed relationship between it and the alliance partner. Sources with knowledge of the talks – apparently ongoing since June – say that the Japanese carmaker wants Renault to cut its 43.4 percent stake in the company.
While Nissan has a 15 percent interest in Renault, it does not enjoy the voting rights granted to Renault. Before Renault can partially dispose of Nissan, the French government would first have to give up. In previous discussions with the FCA, France sought insurance related to construction sites and employment numbers.
Upon withdrawal of the proposal, the FCA argued that it had become "clear that the political conditions in France do not yet exist for such a combination to succeed. "
The talks between the two carmakers are expected to last through the end of the year, with the possibility of a memorandum of understanding related to an alliance restructuring signed by next month, the sources claim. As you might expect, no one in the Nissan or Renault has anything to say to the media.
Under FCA's proposal, the 50:50 merger, valued at $ 35 billion, would mean the creation of the world's third largest car company and potentially lead to $ 5.6 billion in annual efficiencies, or so the FCA claimed. The Italian-American company's chairman, John Elkann, would surprise his role, with Renault CEO Jean-Dominique Senard likely to serve as CEO. Supervised by a board of 11 members, the new entity would be structured through a Dutch holding company.
[Image: Fiat Chrysler Automobiles]