Renault Chairman Opens Up About FCA Merger Failure

It was downright amazing how fast the proposed merger between Fiat Chrysler Automobiles and the Renault-Nissan-Mitsubishi Alliance collapsed. Considering the auto group’s messy state, there may have been no alternative. While Nissan’s unwillingness to support the merger is often cited as a chief reason in FCA’s backing out, it seems the Italian-American company was similarly spooked by internal strife within the alliance.

Renault Chairman Jean-Dominique Senard addressed the matter on Wednesday during the automaker’s annual meeting in Paris. He told shareholders that the French government’s inability to act was what ultimately led to Fiat Chrysler backing out of the deal, while openly lamenting the missed opportunity.

“This project remains, in my head, absolutely remarkable and exceptional,” Senard said. “Frankly, I am saddened.”

According to Bloomberg, Renault’s chairman placed much of the blame on the French government. France wanted Nissan on board and asked Renault to postpone voting on the merger, but FCA turned tail and ran. Senard mentioned it was Finance Minister Bruno Le Maire who first suggested that Renault approach FCA earlier in the year, adding that he was, ironically, one of the people that insisted the deal wait on Nissan — which does not enjoy voting rights due to its minority stake in Renault.

“It was the first time there was a chance to create a European champion at a time when people keep complaining that it doesn’t exist,” he said. “This was a perfect example for France, for Renault and Europe to prove that we can do something together.”

From Bloomberg:

French Finance Minister Bruno Le Maire told franceinfo radio he was not responsible for derailing the merger deal’s collapse. “It remains in interesting opportunity. But I have always been very clear: that it should be in the context of a strategy to reinforce the [Renault-Nissan] alliance,” he said.

Le Maire said he would meet Senard but added he would tell him that strengthening the Renault-Nissan alliance was the priority. “As long as the French state is the main shareholder, its responsibility to the company, its employees, its factories and research centers is to fulfill its role with other shareholders in defining a strategy.”

The deal collapsed after Nissan said it would abstain at a Renault board meeting to vote on the merger proposal, prompting Le Maire to request the Renault board to postpone the vote for five days. “We simply asked for five extra days. Five additional days seems entirely reasonable to me,” Le Maire said. “Fiat withdrew its offer, as it was entitled to do. But believe me, the state will never react under pressure.”

During Wednesday’s meeting, Senard was also pressured about Renault’s decision to block corporate governance changes at Nissan. He denied that the decision was in response to the failed merger and claimed the proposed modifications wouldn’t provide Renault CEO Thierry Bollore the same representation on Nissan’s committees as Nissan-nominated directors have on committees of the French company’s board. “We’re not asking for more than this. It’s not a reason to start a war,” Senard said.

He also acknowledged that the fallout stemming from Carlos Ghosn’s arrest has been a major hurdle for both companies. Senard, who has been charged with repairing the fractured alliance in Ghosn’s stead, said the matter “left the alliance more damaged than what was initially apparent.”