FCA-Renault merger not off the table yet

Nissan now sees the merger as a powerful bargaining chip.

The merger between Fiat-Chrysler Automobiles (FCA) and Paris-based Renault isn't completely off the table, according to insiders. The two companies are actively looking for ways to make amends, and to get Nissan to hop on board.

Nissan allegedly sees the proposed tie-up as one of the most powerful bargaining chips it could hope for. The Japanese firm has been in an unbalanced alliance with Renault since it teetered on the brink of bankruptcy in 1999, and its top executives have clamored for more power in recent years. It's much bigger than Renault, after all. Sources familiar with the talks told Reuters that Nissan will support the merger if Renault agrees to reduce the 43.4-percent stake it owns in the Japanese firm.

How much of Nissan Renault will need to sell to satisfy executives isn't known. It's in a tricky position, though. On one hand, Nissan wants more freedom in exchange for its stamp of approval. On the other hand, the French government -- which owns about 15 percent of Renault, and sees an immense value in the alliance -- will certainly pressure top officials to keep a significant stake in Nissan. Meanwhile, FCA will likely also encourage Renault to give up as little as possible. The merger will need to be completely re-negotiated if Renault significantly reduces its share to, for example, five percent. The French firm isn't worth as much without Nissan.

FCA chairman John Elkann and Renault boss Jean-Dominique Senard have met several times since the merger talks abruptly ended on June 6. The discussions are reportedly going well, but neither company has commented on what's being said, or even confirmed the two men are meeting. However, if they find a common ground, they'll likely announce a new deal in the not-too-distant future.

"If there's going to be a deal it will probably be in weeks rather than months," a source who asked for anonymity told Reuters.

Photo by Ronan Glon.