Fiat-Renault merger 'good opportunity': France's finance minister

Tokyo, JapanUpdated: Jun 10, 2019, 05:16 PM IST

File photo. Photograph:(AFP)

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On May 27, FCA stunned the auto world with a proposed 'merger of equals' with Renault that would -- together with Renault's Japanese partners Nissan and Mitsubishi Motors - create a car giant spanning the globe.

A proposed merger between Renault and Fiat-Chrysler remains a "good opportunity," France's finance minister said Monday after the Italian-American carmaker withdrew the offer over "unreasonable" political resistance from Paris.

"A merger project with FCA remains a good opportunity," Bruno Le Maire told reporters in Tokyo, where he is meeting Japanese officials after this weekend's gathering of G20 finance ministers.

But he said any merger would have to ensure the "durability" of Renault's alliance with Japanese automakers Nissan and Mitsubishi Motors, as well as preserve manufacturing jobs in France.

On May 27, FCA stunned the auto world with a proposed "merger of equals" with Renault that would -- together with Renault's Japanese partners Nissan and Mitsubishi Motors -- create a car giant spanning the globe.

A combined group would be by far the world's biggest, with total sales of some 15 million vehicles, compared to both Volkswagen and Toyota which sell around 10.6 million apiece.

But FCA pulled the plug on the deal suddenly last week, saying negotiations had become "unreasonable" due to political resistance in Paris.

On Saturday, Le Maire told AFP that Paris might consider reducing the state's 15-per cent stake in Renault if it led to a "more solid" alliance between the firm and its Japanese partners.

And he said Renault should focus on shoring up its relationship with Nissan, which has soured since the arrest of the alliance's chief Carlos Ghosn on financial misconduct charges, before pursuing mergers with other firms.

"Otherwise, everything risks collapsing like a house of cards," he warned in the interview on the sidelines of the G20 finance ministers meeting.

In the latest sign of deteriorating ties between the alliance partners, Nissan said Monday that Renault plans to block the Japanese firm's plans to overhaul its governance structure.

Nissan CEO Hiroto Saikawa said Renault had informed the company in a letter that it would abstain from a vote on the overhaul, effectively denying the measure the two-thirds majority needed to pass.

"Nissan finds Renault's stance on this matter most regrettable, as such a stance runs counter to the company's efforts to improve its corporate governance," Saikawa said in a statement.

The measures would introduce three governance committees intended to improve oversight at Nissan, but Renault reportedly fears the changes would reduce its influence.

Le Maire declined to comment directly on the spat but urged reconciliation.

"The management of Renault and the management of Nissan must resolve their difficulties and misunderstandings as soon as possible," he said Monday.