PARIS -- Renault SA’s board failed to make a decision on Fiat Chrysler Automobiles' proposed merger, extending discussions for a second day after its partner, Nissan Motor Co., put up resistance to the deal.
"The board of directors has decided to continue to study with interest the opportunity of such a combination and to extend the discussions on this subject," Renault's board said in a statement at the end of a three-hour meeting on Tuesday.
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. But longtime Renault partner Nissan has resisted going along, while the French company’s most powerful shareholder -- the government -- has outlined a list of demands on jobs and a board seat.
No unexpected issues arose at the Tuesday meeting and it’s still possible that a decision to move forward will be reached Wednesday on a deal that would create the world’s third-largest automaker, according to people familiar with the matter.
Nissan’s two representatives on the Renault board are likely to abstain, people familiar with the matter said earlier.
The Japanese company’s CEO, Hiroto Saikawa, muddied the waters Monday by saying the company needs to review the future of its two-decade alliance with Renault, including contractual relationships, in light of the proposed Fiat deal. While the Yokohama-based company can’t block a Fiat-Renault combination, it could use a strong presence in China, Japan and the rest of Asia, as well as an electric-car technology, as leverage.
French Finance Minister Bruno Le Maire has also said he wants any combination with Fiat to come within the framework of the Franco-Japanese alliance, which also includes Mitsubishi Motors Corp. The government has also demanded guarantees on French jobs, industrial sites, board room representation and participation in a European electric vehicle battery project.
Under terms of the proposal, Renault shareholders would get an implied premium of about 10 percent, while Fiat owners would get dividends to account for its higher equity value.
Renault shares rose 4.3 percent at the close in Paris, while Fiat climbed 3.9 percent in Milan, giving the firms a combined market capitalization of about 35 billion euros ($39 billion).
The relationship between Renault and Nissan has been strained by the fallout from the arrest of their former chairman, Carlos Ghosn, in November. Mitsubishi Chairman Osamu Masuko has said he would need more time to determine the benefits, if any, for the Japanese automaker of the Renault-Fiat merger.