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FCA and Renault are in "advance" talks to partner,with CTC having more power than all of Nissan
- Thread starter AlexB
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Let's not forget that this merger has nothing to do with North American business. Even if this new company will be in Alliance with Nissan-Mitsubishi they will be competitors on the market and they will fight for each customer. Same in Europe but in Europe it will be different between Renault's and FCA's brands and they will act as a one company in development which can't be said for an Alliance where currently both Renault and Nissan had veto right and can chose to develop or purchase different technologies.
djsamuel
Member
I am thinking about some of the potential benefits to FCA. If you remember when Chrysler bought AMC from Renault, some of the Renault engineering team and methodology came with it. That resulted in vehicles like the Intrepid and Concorde and by extension the cloud cars. That was a real turning point for Chrysler engineering until Daimler destroyed it. I'm hoping for some synergy again.
True that.. I've been buying new Jeeps since the 1970's and even when Renault bought AMC nothing really changed for Jeeps.. they went right on doing their thing. Then Chrysler bought Jeep and Lee Iacocca pretty much made Jeep better.
So yea for North America I guess nothing will change, except where the money gets banked.
So yea for North America I guess nothing will change, except where the money gets banked.
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Peugeot Chief Sees Fiat Deal as ‘Virtual Takeover’ of Renault
Fiat Chrysler Automobiles NV plan to merge with Renault SA drew criticism from the French carmaker left on its own, Groupe PSA, that contrasts with backing for the deal from investors and governments.
In a memo sent to top officials of the Peugeot owner on Monday, CEO Carlos Tavares highlighted risks to the proposal. Renault was chosen mainly because its value was depressed by the troubled alliance with Nissan Motor Co. following the Carlos Ghosn affair, according to the memo. Paris-based PSA held talks with Fiat earlier this year on potential collaboration.
“The transaction proposed by Fiat Chrysler therefore seems particularly opportunistic, largely to its benefit,” the note said, while acknowledging potential for savings. “For Renault, this may be an asset in discussions with Nissan, but it could also weaken the alliance or even lead to an unwinding.”
A spokesman for PSA declined to comment.
For Tavares, Fiat’s decision to pair up with Renault represents a missed opportunity. Since arriving in 2014, the 60-year-old executive -- a former protege of Ghosn at Renault -- has turned around a struggling PSA by focusing relentlessly on efficiency and scale. He held talks with Fiat earlier this year to build a new “super platform” before the Italian-American company slipped into the arms of Renault.
Now Tavares may be left with options such as a potential tie-up with Jaguar Land Rover. More than three-quarters of PSA’s revenue comes from Europe, where automakers face a consumer slowdown and a squeeze on profit margins from stricter emission regulations.
At the Geneva car show in March, it looked like Fiat and PSA would pair off. Tavares and his counterpart at Fiat, Mike Manley, spoke publicly about the desire to participate in consolidation.
But Fiat Chairman John Elkann wasn’t convinced. A deal with PSA would rely on disruptive and politically unpalatable job cuts, while Renault, based in the Paris suburb of Boulogne-Billancourt, offered a more-advanced program for electric cars and greater access to Asia through Nissan.
Renault’s share price has hovered near five-year lows, according to the memo, which -- echoing some analysts -- contends the carmaker’s market value is negative after stripping out its 43% Nissan stake and banking business RCI. “Renault’s current valuation largely explains Fiat’s interest in a merger,” it said, calling the deal a “virtual takeover of Renault by Fiat.”
Relations between Nissan and Renault have been strained since the arrest of alliance leader Ghosn in November. Recently, Nissan pushed back against a Renault plan to join together under a 50-50 holding company structure. Should the alliance break up, Renault may end up unwinding its Nissan stake “under particularly deteriorated conditions,” the memo said.
The Franco-Italian tie-up bears management and governance risks, along with the possibility of antitrust remedies, according to the note. The transaction will "open a period of fragility for the various actors," it concluded.
Bloomberg - Are you a robot?
Fiat Chrysler Automobiles NV plan to merge with Renault SA drew criticism from the French carmaker left on its own, Groupe PSA, that contrasts with backing for the deal from investors and governments.
In a memo sent to top officials of the Peugeot owner on Monday, CEO Carlos Tavares highlighted risks to the proposal. Renault was chosen mainly because its value was depressed by the troubled alliance with Nissan Motor Co. following the Carlos Ghosn affair, according to the memo. Paris-based PSA held talks with Fiat earlier this year on potential collaboration.
“The transaction proposed by Fiat Chrysler therefore seems particularly opportunistic, largely to its benefit,” the note said, while acknowledging potential for savings. “For Renault, this may be an asset in discussions with Nissan, but it could also weaken the alliance or even lead to an unwinding.”
A spokesman for PSA declined to comment.
For Tavares, Fiat’s decision to pair up with Renault represents a missed opportunity. Since arriving in 2014, the 60-year-old executive -- a former protege of Ghosn at Renault -- has turned around a struggling PSA by focusing relentlessly on efficiency and scale. He held talks with Fiat earlier this year to build a new “super platform” before the Italian-American company slipped into the arms of Renault.
Now Tavares may be left with options such as a potential tie-up with Jaguar Land Rover. More than three-quarters of PSA’s revenue comes from Europe, where automakers face a consumer slowdown and a squeeze on profit margins from stricter emission regulations.
At the Geneva car show in March, it looked like Fiat and PSA would pair off. Tavares and his counterpart at Fiat, Mike Manley, spoke publicly about the desire to participate in consolidation.
But Fiat Chairman John Elkann wasn’t convinced. A deal with PSA would rely on disruptive and politically unpalatable job cuts, while Renault, based in the Paris suburb of Boulogne-Billancourt, offered a more-advanced program for electric cars and greater access to Asia through Nissan.
Renault’s share price has hovered near five-year lows, according to the memo, which -- echoing some analysts -- contends the carmaker’s market value is negative after stripping out its 43% Nissan stake and banking business RCI. “Renault’s current valuation largely explains Fiat’s interest in a merger,” it said, calling the deal a “virtual takeover of Renault by Fiat.”
Relations between Nissan and Renault have been strained since the arrest of alliance leader Ghosn in November. Recently, Nissan pushed back against a Renault plan to join together under a 50-50 holding company structure. Should the alliance break up, Renault may end up unwinding its Nissan stake “under particularly deteriorated conditions,” the memo said.
The Franco-Italian tie-up bears management and governance risks, along with the possibility of antitrust remedies, according to the note. The transaction will "open a period of fragility for the various actors," it concluded.
Bloomberg - Are you a robot?
GasAxe
Active member
Tavares is sowing sour grape seeds. Peugeot is the big loser in this deal. Of course the deal was brokered on the weakened state of the tumultuous Renault-Nissan alliance. Identify weakness then make an offer they can’t refuse is how the game is won.
I’d love to know what GM and Ford are thinking about all this.
I’d love to know what GM and Ford are thinking about all this.
Sickboy
Member
If Renault does have “negative value” outside of Nissan, why wouldn’t they want the tie up? Seems that fca stepping in would be a boon to to company in every way, especially if Nissan takes no issue with it. If fca can shore up the strained relationship between Renault-Nissan I see a win win win situation. Any smears claiming Renault is being taken advantage of, is misrepresenting how much Renault needs this relationship
Renault Board will meet on Tuesday to vote:Renault board to review FCA merger move on Tuesday
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On the first case Grand Cherokee and Durango. As we know Grand Cherokee and future 3 row unibody Jeep will move to Giorgio while Durango could be in borrowed time before the switch to a new platform whether it's a unibody or BOF design.
AFAIK only one vehicle in US is build on CUSW. It's a Cherokee. And only one additional in the whole world which is Jeep Grand Commander.
Yes, we may say that Pacifica is also on CUSW by due to to large difference in width it's most likely not possible to make it alongside Cherokee or Grand Commander. I would say it's a CUSW evolution.
I forget one more platform from FCA's side. That's a LX and Maserati derivates. It will not be around forever and it's clear that Maserati will introduce Giorgio in the future starting with their D segment SUV.
Classic Ram 1500? That's also one candidate. It will not be around forever.
I can add some candidates from Renault. For example RWD city car named Twingo which shares platform with Smart.
Dacia models which will abandon their version of an old B platform and which will switch to modular CMF-B
Renault Kangoo is still using old C platform. It will switch o CMF-B or CMF-C/D.
So platform part of the deal and saving which is 20% of 5 billion euros will not be that hard to achieve. IMO it's pretty much straight forward.
It's different on engine front. 30% of current combined engines will die. Combined as FCA plus Renault.
Dunno about Nissan. They are not directly part of this deal and they may chose to put veto on some decisions which they have right as a part of Alliance. Veto just means that they are not obligated to pursue all technical solutions as Renault. Even now Nissan is forcing CVT transmission, 2.0 turbo will variable compression while Renault has wet DCT transmissions which they are buying from FCA and have 1.8 turbo engine.
AFAIK only one vehicle in US is build on CUSW. It's a Cherokee. And only one additional in the whole world which is Jeep Grand Commander.
Yes, we may say that Pacifica is also on CUSW by due to to large difference in width it's most likely not possible to make it alongside Cherokee or Grand Commander. I would say it's a CUSW evolution.
I forget one more platform from FCA's side. That's a LX and Maserati derivates. It will not be around forever and it's clear that Maserati will introduce Giorgio in the future starting with their D segment SUV.
Classic Ram 1500? That's also one candidate. It will not be around forever.
I can add some candidates from Renault. For example RWD city car named Twingo which shares platform with Smart.
Dacia models which will abandon their version of an old B platform and which will switch to modular CMF-B
Renault Kangoo is still using old C platform. It will switch o CMF-B or CMF-C/D.
So platform part of the deal and saving which is 20% of 5 billion euros will not be that hard to achieve. IMO it's pretty much straight forward.
It's different on engine front. 30% of current combined engines will die. Combined as FCA plus Renault.
Dunno about Nissan. They are not directly part of this deal and they may chose to put veto on some decisions which they have right as a part of Alliance. Veto just means that they are not obligated to pursue all technical solutions as Renault. Even now Nissan is forcing CVT transmission, 2.0 turbo will variable compression while Renault has wet DCT transmissions which they are buying from FCA and have 1.8 turbo engine.
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French demands challenge FCA-Renault deal push
France has increased its demands as it seeks to maintain government influence if Renault and Fiat Chrysler merge, people close to the negotiations said.
"It's understandable that the French government is pushing here and there, but FCA probably isn't ready to re-open the whole deal," one source close to the tie-up talks said. "If it drifts back towards a quasi-French nationalised business, things may start to fall apart."
In Italy, where the government has consistently said it supports the deal, Deputy Prime Minister Matteo Salvini's right-wing League Party expressed annoyance with the French position.
France should sell its Renault stake to meet EU deficit limits rather than seek more influence, the party's economics spokesman Claudio Borghi said. "By what right, in the Europe of liberalism and privatisations, can the French state negotiate seats on the board of a car company?"
FCA and Renault have also stressed they want to preserve the Renault-Nissan alliance - already strained by the arrest and ouster of Chairman Carlos Ghosn, who is now facing trial in Japan on financial misconduct charges he denies.
Nissan CEO Hiroto Saikawa said on Monday the automaker would conduct a "fundamental review" of its relationship with Renault if its tie-up with FCA went through. However, he conceded that FCA's arrival could bring "opportunities for further synergies."
The claimed 5 billion euros ($5.6 billion) in cost and investment savings would depend partly on FCA access to technology jointly owned by Nissan, executives acknowledge.
Renault had no comment on Saikawa's statement but a source close to the French automaker's board said it could have been worse. "If you want to say no, you say no," he said.
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FCA-Renault bid clears French hurdles as board meets: sources
FRANKFURT/PARIS (Reuters) - Renault directors were preparing to review Fiat Chrysler’s (FCA) $35 billion merger offer on Tuesday, after the Italian-American carmaker resolved differences with the French government overnight, three sources said.
The compromise on French government influence over a combined FCA-Renault may clear the way for Renault’s board to approve a framework agreement beginning the long process of a full merger, unless new issues surface at the meeting.
France, Renault’s biggest shareholder with a 15% stake, had been pressing for its own guaranteed seat on the new board and an effective veto on CEO appointments.
But after late-night talks with FCA Chairman John Elkann, the French government has accepted a compromise that would see it occupy one of four board seats allocated to Renault, balanced by four FCA appointees, the sources said.
Renault would also cede one of its two seats on a four-member CEO nominations committee to the French state, they said.
Renault, FCA and the French government all declined to comment on the discussions.
FRANKFURT/PARIS (Reuters) - Renault directors were preparing to review Fiat Chrysler’s (FCA) $35 billion merger offer on Tuesday, after the Italian-American carmaker resolved differences with the French government overnight, three sources said.
The compromise on French government influence over a combined FCA-Renault may clear the way for Renault’s board to approve a framework agreement beginning the long process of a full merger, unless new issues surface at the meeting.
France, Renault’s biggest shareholder with a 15% stake, had been pressing for its own guaranteed seat on the new board and an effective veto on CEO appointments.
But after late-night talks with FCA Chairman John Elkann, the French government has accepted a compromise that would see it occupy one of four board seats allocated to Renault, balanced by four FCA appointees, the sources said.
Renault would also cede one of its two seats on a four-member CEO nominations committee to the French state, they said.
Renault, FCA and the French government all declined to comment on the discussions.
djsamuel
Member
The influence of the French government during and especially after the merger would be my biggest concern. Hopefully, the compromise will limit that; but they could still be a real thorn in FCA's side.
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Communication of Renault’s Board of Directors
June 04, 2019
Boulogne-Billancourt, June 4th, 2019 – Renault's Board of Directors met today to review in detail the elements of the proposal received from FCA (Fiat Chrysler Automobiles) on May 27 for a potential 50/50 merger between Renault S.A. and FCA.
The Board of Directors has decided to continue to study with interest the opportunity of such a combination and to extend the discussions on this subject. The Board will meet again on Wednesday, June 5 at the end of the day.
Communication of Renault’s Board of Directors
June 04, 2019
Boulogne-Billancourt, June 4th, 2019 – Renault's Board of Directors met today to review in detail the elements of the proposal received from FCA (Fiat Chrysler Automobiles) on May 27 for a potential 50/50 merger between Renault S.A. and FCA.
The Board of Directors has decided to continue to study with interest the opportunity of such a combination and to extend the discussions on this subject. The Board will meet again on Wednesday, June 5 at the end of the day.
Communication of Renault’s Board of Directors
James.A
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I heard that the large cars are still testing and they're very much keeping them under wraps by testing on closed tracks and transporting them in trucks so they won't be seen on road. I heard that they handle "phenomenally" so I'd say they are probably still coming... But maybe secret testing means just the opposite... I hope that this merger is what is being reported, an FCA takeover of Renault and that it doesn't water down or ruin the large cars by turning them into unreliable reskinned Nissan's (or Renaults). But if this helps in Europe and gets FCA to access electric and other tech they need for the future then let's have it.
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Italy open to taking stake in FCA-Renault tie-up
Italy would be open to taking a stake in the proposed merger between Renault and Fiat Chrysler Automobiles, as long as the deal triggers economic benefits for the country, a government undersecretary said.
"Our government is open to investment, provided that this brings a positive impact in terms of economic growth and jobs for our citizens," the rightist League's Michele Geraci, who works at the economic development ministry, told Bloomberg when asked about Italy investing in the possible new entity.
The merger would see the French state's stake halved to 7.5 percent, which "in principle is not against our view," Geraci said.
More at: https://europe.autonews.com/automakers/italy-open-taking-stake-fca-renault-tie
Italy would be open to taking a stake in the proposed merger between Renault and Fiat Chrysler Automobiles, as long as the deal triggers economic benefits for the country, a government undersecretary said.
"Our government is open to investment, provided that this brings a positive impact in terms of economic growth and jobs for our citizens," the rightist League's Michele Geraci, who works at the economic development ministry, told Bloomberg when asked about Italy investing in the possible new entity.
The merger would see the French state's stake halved to 7.5 percent, which "in principle is not against our view," Geraci said.
More at: https://europe.autonews.com/automakers/italy-open-taking-stake-fca-renault-tie
djsamuel
Member
It is getting close to the point of walking away. Government involvement could be a disaster down the road.