The Board of Fiat Chrysler Automobiles N.V. (NYSE: FCAU / MTA: FCA), meeting last night under Chairman John Elkann, resolved to immediately withdraw its merger proposal made to Groupe Renault. “It has become clear that the political conditions in France do not currently exist for such a combination to proceed successfully,” FCA said in a terse statement.
Renault S.A.’s Board of Directors yesterday under the chairmanship of Jean-Dominique Senard had voted to continue reviewing the proposal from FCA for a potential 50/50 merger between Renault S.A. and FCA.
However, Renault’s Board of Directors was unable to take a decision due to the request by the representatives of the French State to postpone the vote to a later meeting.
The French State, which owns slightly more than 15% of Renault asked for the delay because, claimed the Finance Minister that Nissan – part of the Renault Nissan Mitsubishi Alliance – was going to abstain from approving the merger. Thus Nissan, which only survived bankruptcy because of Renault, appears to be the poison Japanese pill that killed the deal.
Nissan CEO Hiroto Saikawa’s* last public statement on 3 June regarding the FCA-Renault merger proposal was decidedly chilly or a version of teeth sucking in the Japanese body language vernacular.
He said, “I am aware that FCA’s merger proposal will be discussed by Renault’s board this week. I believe that the potential addition of FCA as a new member of the Alliance could expand the playing field for collaboration and create new opportunities for further synergies. That said, the proposal currently being discussed is a full merger which—if realized—would significantly alter the structure of our partner Renault. This would require a fundamental review of the existing relationship between Nissan and Renault. From the standpoint of protecting Nissan’s interests, Nissan will analyze and consider its existing contractual relationships and how we should operate business in the future.”
For its part, FCA simply said: “FCA remains firmly convinced of the compelling, transformational rationale of a proposal that has been widely appreciated since it was submitted, the structure and terms of which were carefully balanced to deliver substantial benefits to all parties…
“FCA expresses its sincere thanks to Groupe Renault, in particular to its Chairman and its Chief Executive Officer, and also to the Alliance partners at Nissan Motor Company and Mitsubishi Motors Corporation, for their constructive engagement on all aspects of FCA’s proposal.
Stay tuned to this automotive soap opera. FCA said it “will continue to deliver on its commitments through the implementation of its independent strategy.”
*Hiroto Saikawa is currently President and Chief Executive Officer of Nissan Motor Co., Ltd. (NML), a global automotive company with more than 240,000 employees and over US$110 billion in revenue. He has held this position since April 1, 2017, after serving as co-CEO from November 2016. He is also a representative director of NML.
Between April 2013 and October 2016, Mr. Saikawa was Nissan’s Chief Competitive Officer (CCO), where he led Research and Development, Manufacturing, Supply chain management, Purchasing and Total customer satisfaction. Since 1999, he has served in a variety of senior management positions at Nissan throughout the world, including Chairman of the Management Committees of the Americas and Europe. He has also served as the Executive Vice President of Purchasing. In addition to his responsibilities at Nissan, Mr. Saikawa is the current Chairman of the Japan Automobile Manufacturers Association (JAMA). He previously served as a member of the Board of Directors of Renault between 2006 and 2016. Mr. Saikawa joined NML immediately following his graduation from Tokyo University in 1977. He speaks Japanese and English.