FCA-Renault deal revival hinges on Nissan backing, French role

As Fiat Chrysler Automobiles and Renault move on from their failed merger talks, a revival of discussions would depend on overcoming at least two major obstacles.

FCA blamed "political conditions in France" when it withdrew its proposal, and a signal from the French state that it would give up its sway over Renault would be necessary for a resumption of talks, people with knowledge of the situation said.

One option would see France agreeing to reduce its 15 percent stake after obtaining commitments by FCA on French jobs and plants, the people said, asking not to be identified discussing private matters.

For Renault and the state, its most powerful shareholder, repairing the relationship with long-time partner Nissan will take priority over looking at a FCA deal, officials have said.

France in particular views securing the Japanese carmaker's explicit backing as crucial for the success of a Fiat-Renault combination. Nissan representatives on Renault's board abstained in an informal vote on the deal last week, leading France to seek a delay.

Despite the finger-pointing that followed the failed talks, Renault, FCA and France have left the door ajar for a possible deal as they brace for the costly changes sweeping the industry, such as developing electric and autonomous vehicles.

"The project remains, in my head, absolutely remarkable and exceptional," Renault Chairman Jean-Dominique Senard told shareholders on Wednesday.

FCA, in pulling the offer, said it remained "firmly convinced of the compelling, transformational rationale" of its proposal. Bruno Le Maire, the French finance minister, said Thursday that it is an "interesting opportunity" and that talks could resume once the Renault-Nissan alliance has been reinforced.

FCA Mike Manley may have met with Renault executives in Paris Friday to begin new talks, Il Sole 24 Ore reported, citing unidentified people familiar. A FCA spokesman declined to comment.

Le Maire told Agence France-Presse earlier this month that the French state would consider cutting its Renault holding to help shore up the alliance with Nissan, which has bridled at the state's influence over its dominant shareholder. A French government official who was later asked about those comments, however, said any stake sale wasn’t imminent.

In a move that may ease tensions between the automakers, Nissan is ready to accept Renault demands for more representation on its board committees, a person with knowledge of the matter said Friday.

That follows a threat from Senard to abstain from supporting Nissan's corporate governance plan at its annual general meeting on June 25, an apparent riposte after Nissan refused to back the FCA tie-up. Given Renault’s 43 percent stake, its abstention could torpedo the governance measures, formulated to shore up oversight following the Carlos Ghosn scandal.

Nissan and Renault representatives declined to comment.

Strengthening the alliance, which includes Mitsubishi Motors, is likely to take time. Distrust grew after the November arrest in Tokyo of Ghosn, who oversaw all three companies and their alliance, and worsened after Renault began talks with FCA without telling Nissan.