Italy eyes Renault-Fiat stake as France backs deal

Italy would be open to taking a stake in the proposed merger between Renault and Fiat-Chrysler, as long as the deal triggers economic benefits for the country, a government undersecretary said.

“Our government is open to investment, provided that this brings a positive impact in terms of economic growth and jobs for our citizens,” the rightist League’s Michele Geraci, who works at the economic development ministry, said. The merger would see the French state’s stake halved to 7.5%, which “in principle is not against our view,” Mr Geraci said.

France will back the proposed merger, as long as it offers the state a range of guarantees on jobs, a board seat and local headquarters, Finance Minister Bruno Le Maire said as the French carmaker’s board prepared for a second day of deliberations.

Renault’s board was meeting to review Fiat’s proposal after failing to come to a decision on Tuesday.

Its directors are examining in detail a preliminary merger agreement hammered out over the past days, according to sources.

French Finance Minister Bruno Le Maire

Obtaining a seat on the new entity’s board for the French state, the carmaker’s most powerful shareholder, is a “tough point” in the talks, Mr Le Maire said.

Mr Geraci welcomed the possible merger, saying he’s in touch with the players involved “but the decision is with the shareholders of the company.”

Fiat Chrysler’s proposal last week for a 50-50 combination under a Dutch holding company is designed to help the companies add scale, share costs and boost resources for tackling an expensive shift to electrification and autonomous driving.

Longtime Renault partner Nissan has put up some resistance, while the French company’s most powerful shareholder — the French Government — has outlined a list of demands on jobs and a board seat.

The deal would create the world’s third-largest car maker with the chance of becoming a global leader if Nissan later join Nissan and Renault.

The combined entity “would really increase the production scale of the company by a large factor,” and would help Italy catch up with Japan and other countries in electric cars, Mr Geraci said.

Bloomberg