Merger rumors still haven't faded away.
After what started out as a rumor, Fiat Chrysler Automobiles announced it wanted to partner with the Renault-Nissan-Mitsubishi Alliance. The two companies engaged in merger talks but Nissan expressed disinterest in having the deal go through. Almost as soon as the discussions began, FCA withdrew its proposal and the deal was all but dead. Or was it?
The French government also expressed concern with the merger but Renault chairman Jean-Dominique Senard reportedly held secret talks to rekindle the deal. According to Bloomberg, FCA CEO Mike Manley may have also met with officials from Renault to salvage the merger talks. FCA has declined to comment on the situation.
Even though the deal appeared to be finished, negotiations may not have ceased completely. FCA cited "political conditions in France’’ when it withdrew its offer, saying the French government would have to reduce its 15% stake in Renault after Fiat committed to French jobs and factories. While this has been going on, Renault's relationship with Nissan has been seriously thrown into question. Renault has made it clear, repairing its relationship with Nissan takes precedence over any merger talks with FCA and the two sides are reportedly in talks to strengthen their alliance.
"The project remains, in my head, absolutely remarkable and exceptional,” Renault Chairman Jean-Dominique Senard said to shareholders. Senard also said he remains "firmly convinced of the compelling, transformational rationale’’ of the merger proposal.
Bruno Le Maire, the French finance minister, also called the potential merger an "interesting opportunity,” confirming that talks could resume once the Nissan-Renault relationship is repaired. Renault has asked for greater representation on Nissan's board and the Japanese automaker may have to heed the request to repair the relationship. It is surprising to see merger talks continue with FCA when Nissan and Renault are fighting internally. The two companies will doubtless have to solve their issues before merging with another automaker.