French Government Pushing For Closer Renault-Nissan Alliance
Following the failed merger talks between Fiat Chrysler and Renault, the French government has now set a new priority to seek a stronger alliance between the French automaker and Japan's Nissan Motor.
According to France's finance minister, Bruno Le Maire, the government has now changed its strategy in light of the failed merger negotiations.
France, which owns a 15 percent stake in Renault, is now calling on the automaker to prioritize fixing its relationship with Nissan before going into any new merger negotiations. This would apparently be a more viable move for the company in order to protect its assets and the jobs at its global factories.
The government is now making this strategy its top priority following its meeting in Japan with its global partners.
Le Maire mentioned in a statement that he believes that Renault will stand to benefit by bolstering its relationship with Nissan. According to the official, he has seen how the company's factories and research centers have since greatly improved by its partnership with Nissan, but the rift between the two companies threatens to undermine that progress.
The French minister further pointed out that Renault should place its partnership with other automakers as a second priority and that it should have Nissan fully onboard before it attempts any new mergers. Tensions between both companies had escalated following the arrest of former CEO Carlos Ghosn.
The executive was accused of financial misconduct last year and has since been released on bail pending his trial.
Nissan was reportedly not consulted on the Fiat Chrysler merger with the company voluntarily opting out of board voting. Fiat Chrysler pulled out of the merger negotiations following the French government's intervention. France apparently wanted to postpone Renault's voting for the merger citing a disagreement within its board of directors.
Fiat Chrysler officially stated that its reason for backing out of the deal was because of unfavorable "political conditions" in France. Analysts believe that Fiat would have pushed through if the French government didn't intervene. The merged company would have become the world's third largest automaker, making it larger than even General Motors in value and production capacity.
France fired back at Fiat's decision to back out and described its move as being too "pushy." The government accused Fiat of placing massive pressure on Renault to immediately jump into a decision.
According to a report citing sources close to the failed merger negotiations, France had initially supporting going through with the merger prior to fixing Renaults relationship with Nissan. However, the government backtracked on its decision and decided that Nissan would have to be brought on board first before proceeding with the Merger.