FCA And Renault Merger Talks Could Be Back On The Table

Merger talks between Fiat Chrysler Automobiles (FCA) and gRenault are reportedly back on the agenda.

Italian newspaper Il Sole 24 Ore broke the news earlier this week, as cited by Reuters, but failed to offer many details.

The report comes shortly after The Wall Street Journal revealed that Renault could cut its 43.4 per cent holding in Nissan in a bid to restart merger negotiations after they initially fell through on June.

Also Read: Renault Could Cut Its Nissan Stake To Revive FCA Merger Talks

“This is a great example of two companies getting together, saying that the environment is changing and we have to adapt,” CMC Markets analyst David Madden said. “It’s a continuation of a consolidation in the sector to survive in a changing environment.”

It is reported that the proposed merger between FCA and Renault fell apart because Nissan refused to back the deal believing such a move could weaken its influence in the alliance. While Renault owns 43.4 per cent of Nissan, the Japanese car manufacturer only holds a 15 per cent non-voting stake in Renault and appears to be taking this opportunity to even up its alliance with Renault before potentially offering its support to the FCA and Renault merger.

Word from earlier this month indicated that discussions to change the structure of the Renault-Nissan Alliance started soon after the merger collapsed. An internal email from July 12 indicated an agreement between Renault and Nissan could result in an initial memorandum of understanding being signed as early as September.

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