September 24, 2019 / 5:14 PM / 21 days ago

Renault-FCA merger 'behind us', French carmaker says

PARIS (Reuters) - Fiat Chrysler’s (FCHA.MI) merger offer for Renault, which was abandoned in June, was no longer on the table and looked unlikely to be revived for now, the French carmaker’s Chairman Jean-Dominique Senard said on Tuesday.

FILE PHOTO: The logo of French car manufacturer Renault is seen at a dealership of the company in Bordeaux, France, June 12, 2019. REUTERS/Regis Duvignau

Fiat Chrysler withdrew its $35 billion offer for Renault after blaming French politics for derailing the talks. The French state, which has a 15% stake in Renault, had welcomed the plan but pushed for guarantees and concessions that exhausted the patience of FCA, sources said at the time.

In the months since the deal was abandoned, the two groups had looked at ways to potentially revive it, sources have told Reuters, including by reshaping the Renault-Nissan alliance and the shareholding structure.

“This matter is behind us today,” Senard told a hearing in the French senate, echoing similar remarks by Renault’s CEO Thierry Bollore earlier in September.

The aborted project, which would have created the world’s third-biggest carmaker, had caused a further headache for Renault at a time of already strained relations with its alliance partner Nissan (7201.T).

The companies were rocked last year by the arrest in Japan of alliance architect Carlos Ghosn. He is now awaiting trial there on financial misconduct charges, which he denies, linked to his role as Nissan chairman.

The Renault-Nissan alliance was “fundamental”, Senard said.

Carmakers are under pressure as sales falter on softening demand in markets like China and India. They are also grappling with more stringent rules on emissions and are racing to try and produce costlier, clean auto models, adding to pressures that might make alliances or mergers desirable.

A Renault-FCA tie-up would have helped to give the alliance with Nissan a more global dimension it lacks, Senard said.

“The matter is not on the table today. If (the project) were to come back one day on terms and conditions that would be acceptable for all parties I’d be delighted. But it’s not in the works,” he said.

Senard added that more consolidation in the auto sector in Europe would be needed to counter competition from China.

Reporting by Gilles Guillaume; Writing by Sarah White; Editing by GV De Clercq and Jane Merriman

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