FCA and Renault executives meeting to revive merger talks?

The door remains open to a merger, sources say.

In the wake of FCA withdrawing its merger offer early in June, sources indicate that renewed negotiations are possible so long as two key players--Renault alliance partner Nissan and the French government--are willing to play along.

According to Bloomberg, a quiet meeting between FCA CEO Mike Manley and Renault executives may have already taken place Friday, lending credibility to reports that the merger is not completely off the table.

On Nissan's end of the deal, "playing along" would translate to "yes" votes from the company's two representatives on Renault's board. The company had officially said it was "not opposed" to a FCA-Renault tie-up, but to Renault and the government of France, the Japanese partner's lack of enthusiasm for the FCA proposal was enough to inspire cold feet.

The French government, which owns 15% of Renault, reportedly hedged on FCA's offer and instructed the company to request more time to review the deal. Officials were concerned due to Nissan's choice to abstain from voting on FCA's proposition.

Insiders are now convinced that Nissan plans to use its votes as leverage to increase its autonomy. Renault currently owns more than 40 percent of the Japanese automaker. Nissan would like to see that stake reduced.

"Ultimately, it depends on whether the French government wants out," said Leftlane European Editor Ronan Glon.

"Renault probably wants them out; there have been several clashes in the past and the FCA merger is kind of a once-in-a-lifetime chance for the government to bail," he continued.

It has also been reported that FCA is wary of the French government's stake in Renault, and would prefer an arrangement that allows for less intervention in situations such as this one.

"It depends on whether FCA can secure French jobs. Because unions will place the blame for any and all job losses right on the government's lap," said Glon. "It's kind of a fine line. It's doubtful that a FCA-Renault-government alliance can work well in the long term."

The same could be said for a FCA-Renault-Nissan alliance if Nissan can't obtain the independence it wants in the long term.

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