FCA And Renault 50:50 Merger Talks Not Over Yet – Report

FCA Renault merger

FCA-Renault merger negotiations are said to be back on as Renault could cut its 43.4 per cent stakeholding in Renault

According to a new report surfaced on the interweb, Fiat Chrysler Automobiles (FCA) and Renault are back on considering a merger. Italian newspaper Il Sole 24 Ore wrote this week failed to provide in-depth details into the purportedly re-emerged talks.

It comes on the back of Renault reportedly cutting a massive 43.4 per cent stakeholding in Nissan as part of beginning the merger talks again with FCA. Many believe that FCA and Renault are in need of a major alliance to see through the future and adopt newer market environments especially with cleaner emission based solutions coming into play.

Previously it was believed that Nissan refused to accept the proposed merger negotiations between FCA and Renault as it might weaken its position in the global partnership. As opposed to the big holdings of Renault in Nissan, the latter only owns 15 per cent non-voting stake in Renault.

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Therefore, the Japanese auto major could be looking to strengthen its stand in the alliance before supporting the merger with Fiat Chrysler Automobiles. An official press release in early June indicated that the Board of Fiat Chrysler Automobiles N.V. convened and resolved to withdraw its merger proposal made to Groupe Renault.

The difficult political conditions prevailing in France was cited as the reason and the merger talks lasted just over a week before falling through. It was said that the French government authorities demanded many guarantees and relaxations that FCA could not meet in its business case.

Renault S.A.’s Board of Directors told they could not make a decision due to the request produced by French state officials to postpone the vote to a later council. As soon as the initial 50:50 merger negotiations abruptly ended, Renault-Nissan began discussing the process of restructuring within the alliance. An initial MoU could be signed between both the parties by next month supposedly.