French and Italian-US auto giants Renault and Fiat Chrysler are set to announce talks on an alliance, with a view to a potential merger, informed sources said on Sunday. Renault and FCA are likely to unveil the move "within hours, perhaps tomorrow (Monday), before the (Paris) bourse opens," one of the sources told AFP on condition of anonymity, adding an eventual "merger" was on the agenda.
The same source added that a statement would cover "the possibility of a convergence between the two groups" which "will be studied" with a view to a potential merger. A Renault board meeting is scheduled for 8:00 am (0600 GMT) on Monday.
A source close to the French government, which holds 15 percent of Renault, said the authorities have noted the reports but will be "vigilant on jobs, the impact on industry as a whole and the national interest." Renault's current major partnership is with Japan's Nissan, in which it holds 43 percent. Nissan in turn owns 15 percent of its French partner Renault but the imbalance in the relationship has led to serious friction, highlighted by the arrest of former Renault and Nissan chief Carlos Ghosn in Tokyo.
The Wall Street Journal said the talks were "wide-ranging" and could include Renault and Fiat Chrysler "joining large portions of their businesses". Contacted by AFP, neither Renault nor Fiat would comment. The Financial Times, quoting multiple people informed on the talks, said: "The agreement may ultimately lead the carmaker (Fiat-Chrysler) to join the Renault-Nissan-Mitsubishi Alliance in the future," if Nissan can be won over.
Such an alliance would be the world's biggest with estimated total production of some 16 million vehicles. The Renault-Nissan-Mitsubishi combine currently makes around 10.8 million automobiles, compared with Germany's Volkswagen and Japan's Toyota, both on around 10.6 million.
However, the tie-up with FCA could make Renault much more powerful, potentially further upsetting the balance in the Renault-Nissan-Mitsubishi alliance where Ghosn was pushing for much more say before his downfall. "The question now is 'what is the reaction of the Japanese going to be?" said one source close to the issue, suggesting they could be "furious." "Nissan has not been involved in this dossier," the source noted.
In recent weeks, Renault has been pushing for changes to its tie-up with Nissan, suggesting the formation of a 50-50 holding company to run both firms. Nissan however has resisted, feeling it is the bigger company and should be treated as such. Last year, Renault sold 3.9 million vehicles and Nissan 5.65 million, with Mitsubishi accounting for another 1.22 million.
Comments
Comments are closed.