Breaking News
Black Friday SALE: Up to 54% off InvestingPro! Register here
Investing Pro 0
Ad-Free Version. Upgrade your Investing.com experience. Save up to 40% More details

Exclusive: FCA discusses improved Renault merger bid to win French backing

Stock MarketsJun 02, 2019 02:32PM ET
Saved. See Saved Items.
This article has already been saved in your Saved Items
 
© Reuters. FILE PHOTO: A Fiat Chrysler Automobiles (FCA) sign at its U.S. headquarters in Auburn Hills, Michigan

By Laurence Frost

PARIS (Reuters) - Fiat Chrysler is discussing a Renault (PA:RENA) special dividend and stronger job guarantees in a bid to persuade the French government to back its proposed merger between the carmakers, sources close to the discussions said.

The improved offer, if formalized and accepted, would also see the combined company's operations headquartered in France and the French state granted a seat on its board, two people with knowledge of the matter told Reuters on Sunday.

FCA spokeswoman Shawn Morgan declined to comment. The French government, Renault's biggest shareholder with a 15 percent stake, also declined to comment. A Renault spokesman did not return calls and messages seeking comment.

Italian-American FCA is engaged in intensive discussions with Renault and the French government over the $35 billion merger proposal it pitched last Monday to create the world's third-biggest carmaker.

The concessions being discussed are not definitive and depend on other aspects of an emerging compromise deal, both sources cautioned.

They nonetheless increase the chances that the merger plan will be approved by Renault's board, on which the French state has two seats. The board meets again on Tuesday.

Some analysts and French industry leaders had voiced doubts about the 5 billion euros ($5.6 billion) in claimed cost and investment savings, and whether the proposal represents a fair deal for Renault shareholders.

A Renault dividend would improve the valuation in their favor, balancing a 2.5 billion euro proposed dividend to FCA shareholders. The sources did not elaborate on the potential size of a Renault payout.

The merger plan presented on Monday would see the two carmakers acquired by a listed Dutch holding company whose ownership would be split equally between current FCA and Renault shareholders, after special dividend payments.

FCA had proposed locating the combined group's operational head office in a neutral city, most likely London, but has now indicated readiness to base it in the greater Paris area, meeting a key French government demand, both sources said.

The French government is also likely to be granted a seat on the board to reflect its 7.5 percent stake in the merged company, the people said.

Nissan, whose matching 15 percent stake in its French alliance partner will also be diluted to 7.5 percent of the new group, receives a board seat under the plan unveiled on May 27.

Guarantees to maintain Renault's French blue-collar jobs and industrial sites would also be extended to four years from the two initially proposed under the compromise being discussed, the sources added.

Both France's pro-business government and Italy's populist administration back the merger in principle but fraught relations between the two could yet derail the deal if one side feels disadvantaged.

Exclusive: FCA discusses improved Renault merger bid to win French backing
 

Related Articles

What to Make of the Recent Stock Market Pullback?
What to Make of the Recent Stock Market Pullback? By StockNews - Nov 27, 2021

I had written up a commentary that I intended to send out this morning that was going to focus on some bigger-picture, strategic items related to market cycles and developing...

Add a Comment

Comment Guidelines

We encourage you to use comments to engage with other users, share your perspective and ask questions of authors and each other. However, in order to maintain the high level of discourse we’ve all come to value and expect, please keep the following criteria in mind:  

  •            Enrich the conversation, don’t trash it.

  •           Stay focused and on track. Only post material that’s relevant to the topic being discussed. 

  •           Be respectful. Even negative opinions can be framed positively and diplomatically. Avoid profanity, slander or personal attacks directed at an author or another user. Racism, sexism and other forms of discrimination will not be tolerated.

  • Use standard writing style. Include punctuation and upper and lower cases. Comments that are written in all caps and contain excessive use of symbols will be removed.
  • NOTE: Spam and/or promotional messages and comments containing links will be removed. Phone numbers, email addresses, links to personal or business websites, Skype/Telegram/WhatsApp etc. addresses (including links to groups) will also be removed; self-promotional material or business-related solicitations or PR (ie, contact me for signals/advice etc.), and/or any other comment that contains personal contact specifcs or advertising will be removed as well. In addition, any of the above-mentioned violations may result in suspension of your account.
  • Doxxing. We do not allow any sharing of private or personal contact or other information about any individual or organization. This will result in immediate suspension of the commentor and his or her account.
  • Don’t monopolize the conversation. We appreciate passion and conviction, but we also strongly believe in giving everyone a chance to air their point of view. Therefore, in addition to civil interaction, we expect commenters to offer their opinions succinctly and thoughtfully, but not so repeatedly that others are annoyed or offended. If we receive complaints about individuals who take over a thread or forum, we reserve the right to ban them from the site, without recourse.
  • Only English comments will be allowed.

Perpetrators of spam or abuse will be deleted from the site and prohibited from future registration at Investing.com’s discretion.

Write your thoughts here
 
Are you sure you want to delete this chart?
 
Post
Post also to:
 
Replace the attached chart with a new chart ?
1000
Your ability to comment is currently suspended due to negative user reports. Your status will be reviewed by our moderators.
Please wait a minute before you try to comment again.
Thanks for your comment. Please note that all comments are pending until approved by our moderators. It may therefore take some time before it appears on our website.
 
Are you sure you want to delete this chart?
 
Post
 
Replace the attached chart with a new chart ?
1000
Your ability to comment is currently suspended due to negative user reports. Your status will be reviewed by our moderators.
Please wait a minute before you try to comment again.
Add Chart to Comment
Confirm Block

Are you sure you want to block %USER_NAME%?

By doing so, you and %USER_NAME% will not be able to see any of each other's Investing.com's posts.

%USER_NAME% was successfully added to your Block List

Since you’ve just unblocked this person, you must wait 48 hours before renewing the block.

Report this comment

I feel that this comment is:

Comment flagged

Thank You!

Your report has been sent to our moderators for review
Disclaimer: Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. All CFDs (stocks, indexes, futures) and Forex prices are not provided by exchanges but rather by market makers, and so prices may not be accurate and may differ from the actual market price, meaning prices are indicative and not appropriate for trading purposes. Therefore Fusion Media doesn`t bear any responsibility for any trading losses you might incur as a result of using this data.

Fusion Media or anyone involved with Fusion Media will not accept any liability for loss or damage as a result of reliance on the information including data, quotes, charts and buy/sell signals contained within this website. Please be fully informed regarding the risks and costs associated with trading the financial markets, it is one of the riskiest investment forms possible.
Continue with Google
or
Sign up with Email