Fiat Chrysler set to announce Renault tie-up today: Sources
May 26 2019 10:23 PM
Fiat Chrysler Automobiles
Signage stands outside the Fiat Chrysler Automobiles Mack Avenue Engine plant in Detroit, Michigan. Talks between Fiat and Renault have accelerated in recent days, as negotiators found a way to structure a tie-up deal, sources said.

Bloomberg / Milan

Fiat Chrysler Automobiles NV is poised to announce a tie-up with Renault SA as soon as today, opening a path for the Italian-American automaker to eventually become part of the Renault-Nissan Motor Co alliance, according to people familiar with the matter.
The deal may include an exchange of equity, the people said, asking not to be identified because the discussions aren’t public. Nissan isn’t involved, though the transaction would allow the carmakers to join forces later, the people said.
The talks with Fiat have moved ahead despite tensions between Renault and Nissan, illustrating the intense pressure facing automakers to combine efforts and investments. With sales falling in the world’s biggest car markets, manufacturers are being pushed by regulators to electrify and reduce fleet emissions. At the same time, they’ve been forced to spend heavily on self-driving technology or get left behind by deep-pocketed competitors like Alphabet Inc’s Waymo.
Talks between Fiat and Renault have accelerated in recent days, as negotiators found a way to structure a deal, the people said. Representatives from the two companies declined to comment.
Fiat also held initial talks with Peugeot owner PSA Group as it evaluates potential partners, the people said. PSA remains open to “opportunities that would create value on a long-term basis,” it said in an e-mail.
French Meetings
Falling sales in the big three regions — China, the US and Europe — have brought fresh urgency to the cause of consolidation championed for years by the late former Fiat chief, Sergio Marchionne, and deposed Renault-Nissan Chairman Carlos Ghosn.
Fiat has been seeking a partner in recent months, with talks focused on Renault and PSA. Fiat Chairman John Elkann and chief executive officer Mike Manley have made several trips to Paris since the beginning of the year for business meetings as part of their search for ways to make the carmaker stronger, the people said.
Renault has been trying to firm up its two-decade alliance with Nissan, which was shaken by the arrest of Ghosn last November over alleged financial misdeeds. His departure surfaced tensions between the partners, with Nissan executives resisting new proposals by Renault to cement ties through the creation of a holding-company structure.
Relations have steadied in recent weeks, with the appointment of Renault CEO Thierry Bollore to the board of its Japanese partner, and the reappointment of Nissan CEO Hiroto Saikawa, who opposes a merger with Renault. Still, a Renault deal with Fiat would put pressure on Nissan, while potentially making the resulting partnership more formidable.
Together, Renault, Nissan and third partner Mitsubishi Motors Corp sold 10.76mn passenger cars and light trucks last year, putting them on par with the world’s two biggest automakers, Volkswagen AG and Toyota Motor Corp. Adding Fiat to the French and Japanese alliance would bring the total to about 15mn vehicles a year, with a strong presence in all major markets and premium brands like Jeep, Maserati, Alfa Romeo and Infiniti under a single umbrella.
Renault’s partnership with Nissan was thrust into the spotlight in November with the arrest of Ghosn, the chairman and architect of the three global car-making alliance with Mitsubishi.
Fiat Chrysler has been looking for a tie-up since Marchionne created the Italian-American carmaker in 2014. A year later, Marchionne became vocal on the auto industry’s need for consolidation in an analyst presentation called “Confessions of a Capital Junkie.”
Marchionne argued then that carmakers waste €2bn a week by duplicating investments they could share. At the time, Renault-Nissan was considered the second-best fit for Fiat after General Motors Co, according to people familiar with the plan. GM rebuffed Fiat’s approaches.
Carlos Ghosn on May 23.
Fiat also has history with French President Emmanuel Macron, which could help smooth the way for a deal given France’s 15% stake in Renault. In 2013 Macron, then a top adviser to President Francois Hollande, had preliminary talks with Fiat about a merger with troubled Peugeot.
While PSA remains open to deals, based on 2018’s financial results, “there is no hurry to finalise any partnership,” according to an e-mailed statement.

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