Renault and Fiat-Chrysler tie-up clears French hurdle

Compromise on French government’s influence over combined FCA-Renault may clear way for long process of a full merger

France had been pressing for its own guaranteed seat on the new board and a veto on future chief executive appointments. Photograph: Eric Gaillard/File Photo/Reuters

France had been pressing for its own guaranteed seat on the new board and a veto on future chief executive appointments. Photograph: Eric Gaillard/File Photo/Reuters

 

Fiat Chrysler has resolved key differences with France over its proposed merger with Renault, three sources told Reuters on Tuesday, as the French carmaker’s board met to review the $35 billion (€31.4bn) tie-up plan.

The compromise on the French government’s influence over a combined FCA-Renault may clear the way for Renault directors to approve a framework agreement, and begin the long process of a full merger unless new issues surface at their meeting.

France, Renault’s biggest shareholder with a 15 per cent stake, had been pressing for its own guaranteed seat on the new board and an effective veto on future chief executive appointments.

But after late-night talks with John Elkann, the Italian-American carmaker’s chairman, officials approved a compromise giving the French government 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 chief executive appointment committee to the French state, they said.

With Renault chairman Jean-Dominique Senard (66) set to become FCA-Renault’s first operational chief under Mr Elkann’s chairmanship, the move gives France a formal say on the appointment of his successor.

Renault, FCA and the French government, which have been locked in talks over the offer pitched by FCA to create the world’s third-biggest carmaker, declined to comment.– Reuters