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Business deals

Fiat chairman seeks meeting with Nissan and Mitsubishi chiefs

Unlike partner Renault, Nissan has reservations about proposed merger

Chairman of the Fiat Chrysler Automobiles John Elkann is eager to meet with the heads of Nissan Motor and Mitsubishi Motors.   © Reuters

TOKYO -- Fiat Chrysler Automobiles has requested a meeting with top leaders from Nissan Motor and Mitsubishi Motors in order to explain the merger proposal with their French partner Renault, Nikkei learned Thursday.

FCA Chairman John Elkann sent a letter to Nissan President and CEO Hiroto Saikawa, as well as Mitsubishi Chairman and CEO Osamu Masuko, according to a source familiar with the matter.

Renault Chairman Jean-Dominique Senard also met with Saikawa and Masuko on Wednesday in Yokohama to outline his views on the proposal.

The deal is the "best way to implement [Renault's] strategy," Senard told Nikkei in a Thursday interview. Nissan and Mitsubishi, which form a three-way alliance with the French automaker, also stand to benefit, he said.

A merger with FCA would be a good opportunity to bolster Renault's alliance with Nissan and Mitsubishi, Senard said. Scaling up means lower costs on shared car platforms and parts, and the companies "will be able to concentrate on the specific brands with their specific promises," he said.

Renault Chairman Jean-Dominique Senard, left, and Nissan President and CEO Hiroto Saikawa speak at a news conference in Yokohama in March. (Photo by Yuki Nakao) Renault Chairman Jean-Dominique Senard, left, and Nissan President and CEO Hiroto Saikawa speak at a news conference in Yokohama in March. (Photo by Yuki Nakao)

Senard also said the merger could give Nissan voting rights in Renault. Because of French rules, Nissan's current 15% stake in Renault does not come with voting rights. But a merger with FCA would move the French company's headquarters to the Netherlands, which will allow Nissan to have a long-awaited say.

"I knew that it was a frustration for Nissan, and so I was very happy to bring the news," Senard said.

The Japanese automaker's current priority is building its business back up as North American sales flag. A merger between FCA and Renault "can accelerate the process," Senard said, stressing that a four-way alliance would result in greater synergies.

Comments by Nissan's leadership "became more and more positive because they understood what it was all about," he said.

"There are many opportunities for Nissan" if FCA joined the three-company alliance, Nissan's Saikawa also acknowledged in a separate Thursday interview with Nikkei.

But he expressed some reservations. The merger would change Nissan's capital relationship with Renault, "which obviously has an impact," he said. "It is necessary to carefully examine various pieces of information."

The Japanese automaker worries that a fourth player could weaken its clout in the alliance. Nissan has so far rebuffed Renault's calls for their two-way merger, owing to the fact that it far outweighs the French company in both unit sales and revenue. But the combined Renault and FCA would become the leader once merged.

Nissan's opposition would have no direct impact on Renault and FCA because it lacks voting rights. But its cooperation is key to maximizing synergies from the merger, since Nissan and Renault have been working on joint procurement and new-car development since 1999. They jointly operate a plant in India.

Nissan also has an edge over Renault and FCA on next-generation vehicles, like electric cars and connected vehicles. It will carefully consider how to play up its advantages in a four-way framework in order to survive in a rapidly changing industry.

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