Renault Leader Stands By Fiat Merger Attempt -- WSJ
13 Juni 2019 - 09:02AM
Dow Jones News
By Nick Kostov
This article is being republished as part of our daily
reproduction of WSJ.com articles that also appeared in the U.S.
print edition of The Wall Street Journal (June 13, 2019).
PARIS -- Renault SA's chairman defended his attempt to merge the
French auto maker with Fiat Chrysler Automobiles NV, criticized the
French government for not backing it and said talks were pursued in
the first place at the suggestion of the country's finance
minister.
The revelation of the French government's early involvement in
the deal is the latest twist in an already convoluted multiplayer
standoff involving the two European auto makers, Renault's Japanese
partner Nissan Motor Co., and the governments of France and Japan.
Neither Fiat Chrysler nor Renault has ruled out resuming talks, but
for that to happen a complicated set of preconditions would need to
be met involving all five parties.
As Renault's Jean-Dominique Senard addressed the company's
annual general meeting Wednesday, he gave no indication that steps
were being taken to revive the merger bid but said the original
goal was still laudable.
"There was a possibility to create a European champion at a time
when we keep complaining about the lack of them," Mr. Senard said,
adding that he found the state's decision not to back the project
last week "regrettable."
He said it was French Finance Minister Bruno Le Maire who first
prodded him to engage in talks with Fiat Chrysler.
"When the finance minister suggested to me several months ago
that I enter into contact with the management of Fiat Chrysler, I
did it," Mr. Senard said. "The benefits of this operation are very
evident, and in my industrial life I've rarely seen a merger
project that could bring so many positive synergies."
A French government official said there was no contradiction
between encouraging Mr. Senard to engage with Fiat Chrysler and
later asking for an extension of discussions before backing a
merger. "We always said this was an opportunity, and it's still an
opportunity, but a number of conditions had to be met," the
official said.
Fiat Chrysler and Renault had discussed common projects for
months before taking up the idea of a full-blown merger in
mid-May.
Mr. Senard was appointed chairman of the French car maker in
January amid the fallout from the travails of former Chairman
Carlos Ghosn, who was arrested late last year in Japan on
allegations of financial crimes. He denies the charges relating to
his executive role at Nissan.
The French government, which has a 15% stake in Renault, said it
would support the Fiat merger only if Nissan also backed it. The
two auto makers have been in an alliance for two decades, but have
fought openly since the arrest of Mr. Ghosn, who forged the
partnership.
They have sparred over the conduct of the investigation into Mr.
Ghosn's tenure at Nissan. They also have fought over the future
structure of their alliance, as well as Nissan's approach to
rewriting its governance and reshaping the Japanese company's
board.
Nissan had indicated last week it would abstain from a vote on
the Fiat-Renault merger because it needed more time to study its
effects on its own operations. That stance prompted the French
government to ask to delay the vote, which in turn led Fiat
Chrysler to withdraw its offer.
The government of Japan hasn't played a public role in the
various deliberations, but officials in Tokyo are monitoring
developments related to the Renault-Nissan alliance and have in the
past been influential in discussions with Nissan about its
relationship with Renault. Meanwhile, officials in Paris have said
the French government's priority as Renault's largest shareholder
is to strengthen the alliance with Nissan.
This week, Nissan's chief executive met with an adviser for Fiat
Chrysler in Japan. People close to Nissan say it now would consider
backing the merger if there is an agreement in place for the
combined company to reduce Renault's stake in Nissan.
Renault owns 43% of Nissan, while the Japanese auto marker owns
15% of its alliance partner through nonvoting shares.
Mr. Senard said Wednesday that Renault's role at Nissan had been
vastly diminished by a 2015 agreement involving the two companies
and the French state. He added that he wouldn't preside over an
"extra reduction to Renault's role in the alliance, and in
particular at Nissan."
Mr. Senard said the alliance between Renault and Nissan had been
more damaged by what he called the "Ghosn affair" than it appeared,
saying trust between the partners was "eroded."
Write to Nick Kostov at Nick.Kostov@wsj.com
(END) Dow Jones Newswires
June 13, 2019 02:47 ET (06:47 GMT)
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