TOKYO -- The proposed merger between Fiat Chrysler Automobiles and Renault raises new questions about the future of the French automaker's turbulent alliance with Nissan Motor, but the Japanese partner appears intent on staying put and watching closely.
If the French and Italian-American automakers combine and create a new entity that takes Renault's place in the alliance, Nissan might have leverage to demand changes to the Restated Alliance Master Agreement, which sets out the terms of the partnership.
Renault, whose top shareholder is the French government, owns a 43.4% stake in Nissan. The Japanese company holds a 15% share in Renault, as well as 34% ownership in junior alliance member Mitsubishi Motors. The partnership has come under strain since the arrest in Japan last year of Carlos Ghosn, former chairman of the three companies.
The master agreement lets Nissan raise its stake in Renault at its own discretion if the Japanese automaker determines there was undue interference in its business decisions from the French government or elsewhere. Under Japanese law, if Nissan boosts its interest to at least 25%, Renault would lose the voting rights afforded by its hefty stake in its partner.
But it is unclear whether the impact of a Renault-FCA merger would constitute harm to Nissan's rights based on the terms of the agreement, and Nissan is considered reluctant to resort to such tough tactics.
"I'm open to any forward-looking discussions to strengthen the alliance," Nissan CEO Hiroto Saikawa told reporters on Monday, suggesting that the company does not consider leaving to be an option.
The driving force behind Fiat Chrysler's merger offer is Chairman John Elkann, according to a source familiar with the situation. Elkann -- a member of Fiat's founding family, which still controls FCA -- told Nikkei he seeks to embrace Nissan and Mitsubishi Motors as "valued and respected partners."
Nissan's continued presence is crucial to one of FCA's apparent goals with the proposal: strengthening its bargaining power as automakers pursue partnerships with outside players to adapt to the extraordinary technological upheaval underway in the industry.
Tech companies wielding massive valuations along with research and development budgets to match, like Alphabet with self-driving car subsidiary Waymo, have raced ahead in the field of CASE -- connected, autonomous, shared and electric vehicles. Companies such as China's Contemporary Amperex Technology Ltd., the world's top maker of automotive batteries, are solidifying their dominance in electrification.
A single alliance encompassing Fiat Chrysler, Renault, Nissan and Mitsubishi Motors would boast annual sales exceeding 15 million vehicles, giving it an edge in talks with big-name businesses outside the industry.
FCA also seeks to tap the alliance's own expertise in electrified autos. The Italian-American company remains far behind the curve in this area, making much of its money from large vehicles criticized as "gas guzzlers" in North America.