At the end of April 2019, Jean-Dominique Sénard, Chairman of Renault, has already been turned down by Nissan over a plan to merge the two companies. At the end of May-early June 2019, a merger with FCA (Fiat Chrysler Automobiles) was abandoned.
After having received an offer to merge with FCA, Renault’s Board of Directors indicated in a press release on June 3, that it was in favour of opening discussions. The new entity would become, by far, with the Alliance, the world’s leading carmaker ahead of Volkswagen and Toyota.
Shortly afterwards, the French government announced that it is in favour of the merger but that it will set conditions for this to be achieved.
At Renault’s partner in the Alliance, Hiroto Saikawa, Nissan’s Chief Executive Officer, was not involved in the preliminary discussions and was only made aware of an operation that would fundamentally change the structure of the Alliance the day before the announcement.
The merger would lead to a new balance of power within the Alliance, to the advantage of the French.
While negotiations between the two manufacturers are starting, Renault who indicated it wanted the valuation to be reviewed is being told by FCA that its offer is non-negotiable.
Difficulties are piling up for Jean-Dominique Sénard, who is facing increasing pressure from the French state at the negotiating table.
For his part, at Nissan, Hiroto Saikawa indicated on June 3, 2019, that he would like to carry out “a full review of existing relations between Nissan and Renault” before considering the arrival of FCA within the scope of the Alliance. Once again, the Japanese manufacturer is not inclined to modify the structure of the Alliance.
Renault’s Board of Directors, which is meeting on the evening of June 5, 2019, is expected to vote on the merger with FCA. The two Nissan representatives present abstain, the two representatives of the State insist the vote of the merger should be delayed to allow further discussions with the Japanese counterpart at political level.
A few hours later, irritated, FCA withdrew its merger offer. Jean-Dominique Sénard has been unable to gain support and gather the Boards of Directors of Renault around him.
On the morning of June 6, 2019, in a short press release, Renault “expresses its disappointment not being able to pursue the FCA proposal further”. The company returns to the status quo with Nissan.
“Negotiations were going well. We had obtained guarantees on everything, governance, employment, production sites. That left Nissan, but it was being taken care of. All of a sudden, the State changed its mind and asked for more time. But thios is something that should have thought about beforehand, not to take FCA by surprise like that! ” told an internal Renault source quoted in Le Parisien.
As a result, a few months after its aborted merger with Renault, FCA entered into discussions and signed a merger agreement with PSA, the other major French carmaker.