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France slows down the merger

Representatives of the French state would like to have Renault partner Nissan in a merger with Fiat Chrysler necessarily on board. They therefore require more time.

Nina Belz, Paris

  French Economy Minister Bruno Le Maire was open to a merger between Renault and Fiat Chrysler, but has clear ideas about their design. (Photo: Benoit Tessier / EPA)

The French finance minister Bruno Le Maire was open to a merger between Renault and Fiat Chrysler but has clear ideas on how to shape it. (Photo: Benoit Tessier / EPA).

The deliberations of Renault's board lasted remarkably long. The decision whether the French car maker with Fiat Chrysler (FCA) should officially start a merger negotiations was scheduled for Tuesday. But even after a second, a long day of meetings, the panel could not reach us on Wednesday night – and after both Renault and its largest shareholder, the French state, initially expressed themselves positively on the offer from the American-Italian rival. In a dry press release from Renault, it is said that representatives of the French state had asked to postpone the decision again. FCA then drew its bid last week on the night to Thursday. The reason: The "political conditions" are currently not in France.

Terms from the Ministry

The Ministry of Economic Affairs was surprised on Thursday morning about the FCA's convicted withdrawal. A press release from the minister said it had worked constructively on the board. The government had just passed another five days to get support from the Renault alliance partner Nissan.

The French state, with 15.1% of Renault's largest shareholder, had already made it clear last week that it wanted a rapprochement statement. Finance Minister Bruno Le Maire set four conditions: the alliance with Nissan must be respected, the leadership of the new group should be balanced. The new company should also participate in the French and German funded European battery factory. In addition, the project should not jeopardize jobs or factories. According to Le Maire communication, the Governing Council adopted three of the four points on Wednesday. However, the representatives of Nissan are not ready to support the project.

Sustainability at Nissan

Representatives of the French state and Nissan do not have a majority on the board. But they represent the two largest shareholders in the French car maker. Renault's partner Nissan's role was previously unclear on the merger project. Renault Chairman Jean-Dominique Senard flew to Tokyo last week to consult with Nissan. It was not until Monday that their boss Hiroto Saikawa commented on the merger for the first time, and with relative restraint. Thus, while offering new opportunities for cooperation, it would also change the alliance between Nissan and Renault. Therefore, a "basic review" of cooperation would be necessary, Saikawa said.

Renault had been under Carlos Ghosn and tried to convince Nissan of a merger. Jean-Dominique Senard had repeated the desire for closer cooperation in April, but was again opposed to the Japanese. For Renault, FCA's offering was therefore a viable option to strengthen its position in a market where major investments are needed in the coming years. On the other hand, during its 20 years of cooperation, Nissan and Renault have built up a number of joint projects, including the development of electric cars. Their future would be uncertain.

A spokesman for Bruno Le Maire told France Info on Thursday that Fiat Chrysler has put a lot of pressure on the time from the start and is trying to force a decision. However, it has become clear that you cannot be subjected to pressure.

Concerns about the justice of livelihood

The trade ministers had also been at the back of the finance minister. They are mainly worried about jobs, but also expressed doubts about the usefulness of the mentioned synergies and justice in the offer from the US-Italian group. Also in the French press in recent days had heard the votes that see the supply of FCA critical. Above all, the potential synergies worth EUR 5 billion by observers are considered overly optimistic. They recalled that not only the French state but also the Italians have the opposite of the closure of factories. In addition, it was uncertain what would happen to the development cooperation between Nissan and Renault, about the Japanese exit due to the merger of the alliance.

The hedge fund Ciam, which holds a small stake in Renault, contacted Renault's board earlier this week in a letter warning of the assessment of FCA's bid. The critic's argument is that the offer would come at a time when the Renault share is still under the impression of the deal concerning the former CEO and the chairman of the board, Carlos Ghosn. In fact, at the end of May, the Renault part lost almost 50 percent year on year. In addition, the trust between the alliance partners has suffered from the Ghosn affair.

"It will be a trial against Ghosn"

nbe. · An internal investigation by Renault has revealed further irregularities in the administration of former CEO and President Carlos Ghosn. This time it is about the subsidiary in the Netherlands, Renault Nissan BV. The auditors discovered unjustified costs of EUR 11 million. They were issued for private flights from Ghosn and his wife, Cartier watches or donations to non-profit organizations, it said. While the Renault board said he would not initiate legal action in France at present, but looking for roads in the Netherlands with Nissan, Minister of Finance Bruno Le Maire said on Wednesday that it will be a trial against Carlos Ghosn. The state as the main shareholder has a role to play; He must, among other things, ensure that the company is well run. As early as February, internal research had shown that Ghosn had charged the rent for the place of his wedding and the cost of an annual anniversary at Schloss Versailles, which was tied to his birthday – about 650,000 euros – to Renault. In addition, the Paris Prosecutor's Office has initiated investigations against the Dutch subsidiary after a shareholder sued them for corruption. The subsidiary was set up to escape the control of the shareholders, citing the newspaper "Le Monde" from the application.

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