FCA-Renault bid clears French hurdles as board meets, report says

FRANKFURT/PARIS -- Renault directors were preparing to review Fiat Chrysler Automobiles' $35 billion merger offer on Tuesday, after the automaker 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 percent 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.

Renault is facing resistance from its alliance partner Nissan, Bloomberg reported.

Directors of Renault nominated by Nissan are expected to abstain from a vote on Tuesday, sources told Bloomberg.
Renault's path toward a deal with FCA was muddied on Monday by Nissan, which holds a 15 percent stake in the French automaker as part of their two-decade auto-making alliance.

Nissan CEO Hiroto Saikawa said the company needs to review the future of their partnership, including contractual relationships, in light of Renault's potential tie-up with FCA.

Fiat Chrysler's proposal for a 50-50 Dutch holding company would create the world's third-biggest automaker, adding scale to help the companies share costs and resources while tackling an expensive shift to electrification and autonomous driving.

While Nissan cannot block an FCA-Renault combination, Nissan could use its strong presence in China, Japan and the rest of Asia, as well as its electric-car technology, as leverage.

French Finance Minister Bruno Le Maire has also said he wants any combination with Fiat to come within the framework of the Franco-Japanese alliance, which also includes Mitsubishi Motors.

Bloomberg contributed to this report