Renault, Nissan Ties Take Spotlight -- WSJ
June 10 2019 - 3:02AM
Dow Jones News
By Alastair Gale and Nick Kostov
This article is being republished as part of our daily
reproduction of WSJ.com articles that also appeared in the U.S.
print edition of The Wall Street Journal (June 10, 2019).
FUKUOKA, Japan -- Tensions over a busted merger between Fiat
Chrysler Automobiles NV and Renault SA, and lingering hostilities
between Renault and its Japanese alliance partner Nissan Motor Co.,
spilled out into the open this weekend -- heightening a five-way
game of chicken among two governments and three of the world's
biggest auto makers.
In Japan for a Group of 20 meeting, French Finance Minister
Bruno Le Maire ruled out a quick resumption of talks over Fiat
Chrysler's aborted offer to merge with France's Renault. He said
the auto industry needs further consolidation, but Renault and
Nissan, its longtime partner, should strengthen their alliance
before being involved in any new merger moves.
Renault, meanwhile, signaled it won't back governance changes
proposed by Nissan in the wake of the arrest and ouster of Carlos
Ghosn, the former chairman of both Nissan and Renault, because of
worries they might dilute Renault's influence at Nissan, according
to people familiar with the matter.
Fiat Chrysler walked away from a proposal to merge with Renault
last week, after the French government said it needed more time to
pave the way for such a combination with Nissan. Mr. Le Maire said
in Japan that protecting the two-decade partnership between Renault
and Nissan was the priority for the French government, Renault's
largest shareholder.
"We all know that because of the technological transformations
taking place, in particular with electric and connected vehicles,
there will be a need for industrial consolidation," Mr. Le Maire
said at a press conference following a Group of 20 meeting of
global financial leaders in Japan on Sunday. "But this can only be
the second step, after the reinforcement of the alliance."
Nissan has proposed a set of governance overhauls to be voted on
by directors at its June 25 annual general meeting. The Japanese
car maker has for months been examining its governance in the wake
of Mr. Ghosn's arrest for alleged financial misconduct, which he
denies. As part of its revisions, Nissan wants to set up board
committees responsible for remuneration and audit. Under its
current system, the chairman has almost sole power to determine
director and executive pay.
Renault and Nissan currently share technology and vehicle parts
as part of a three-way tie-up with Mitsubishi Motors Corp. Renault
owns 43.4% of Nissan, while Nissan owns 15% of Renault.
In a letter to Nissan Chief Executive Hiroto Saikawa on
Saturday, Renault Chairman Jean-Dominique Senard wrote that the
French car maker supports Nissan's objective to strengthen its
governance. But revisions "should not serve as a tool directed or
used against Nissan's largest shareholder," Mr. Senard wrote,
according to people familiar with the contents of the letter. Mr.
Senard is a Nissan board member.
The proposal to overhaul governance needs a two-thirds majority
to pass, meaning Renault must support it. People familiar with Mr.
Senard's thinking said the letter merely indicated Renault's first
intention and its position could change before Nissan's
shareholding meeting.
Mr. Le Maire has raised the prospect of the French government
lowering its 15% stake in Renault as part of a shareholding
reorganization, but he said that would only be a possibility in the
longer term.
Mr. Le Maire heads to Tokyo on Monday, where he will meet
Japanese Finance Minister Taro Aso. He said he has no plans to meet
with Nissan's Mr. Saikawa, and it was up to the heads of each
company to discuss how to bolster their alliance.
"All options can be envisaged, and it's up to Renault and Nissan
to make proposals," he said.
Write to Alastair Gale at alastair.gale@wsj.com and Nick Kostov
at Nick.Kostov@wsj.com
(END) Dow Jones Newswires
June 10, 2019 02:47 ET (06:47 GMT)
Copyright (c) 2019 Dow Jones & Company, Inc.
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