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Renault board punts FCA merger discussion to Wednesday

Renault board members failed to come to a decision in Tuesday's talks.

Renault SA board members were unable to come to a decision regarding a proposed merger with Fiat Chrysler Automobiles N.V. (FCA) Tuesday and adjourned the discussions until it reconvenes on Wednesday.

FCA's proposal would see the two companies form a 50-50 partnership based on Holland and designed primarily to improve efficiencies in the European market and promote global expansion of electrification.

According to Automotive News, Tuesday's board meeting was without incident. The two Nissan representatives are expected to abstain when the merger proposal comes to a formal vote, the outlet said, citing sources familiar with the discussions.

On paper, the two companies complement each other well. FCA is strong in the United States, and it's a leader in the lucrative truck and SUV segment. Renault is strong in Europe, and it has already made significant investments in electrification.

FCA also noted Nissan and Mitsubishi, Renault's Japanese partners, will be able to benefit from the merger. However, a tie-up would likely have a major impact on the Japanese side of the current Renault-Nissan Alliance.

How the revamped structure would work remains to be seen. Alliance partner Nissan's representatives have not expressed support for the merger outright, but the company is on record as not being opposed to the deal. Nissan's relationship with Renault has been strained in the wake of former CEO Carlos Ghosn's arrest in November 2018.

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