Japan's Opposition Leaders Discuss Possible Merger

Japan's opposition leaders discuss possible merger

The leader of Japan's Constitutional Democratic Party has called on two other opposition parties to join his party in a bid to grow big enough to win victory over the ruling bloc.

Yukio Edano, president of Japan's largest opposition party, met the President of the Democratic Party for the People, Yuichiro Tamaki, and Leader of the Social Democratic Party, Seiji Mataichi, on Friday. Former prime minister Yoshihiko Noda and other opposition politicians also attended the meeting.

Renault-fca Merger Hinges On Nissan And French Gov Backing

Renault-FCA Merger Hinges On Nissan And French Gov Backing

It seems that reviving merger talks between automotive giants Renault and FCA will depend on overcoming at least two major hurdles: repairing Renault’s relationship with Nissan and the willingness of the French state to reduce its stake in its home automaker.

Nissan Didn't Have Much Say In Merger Talks, But It Had What Fca Wanted

Nissan didn't have much say in merger talks, but it had what FCA wanted

TOKYO — Nissan wasn't consulted on the proposed merger between its alliance partner Renault and Fiat Chrysler, but the Japanese automaker's reluctance to go along may have helped bring about the surprise collapse of the talks. While Nissan Motor Co. had a weaker bargaining position from the start, with its financial performance crumbling after the arrest last year of its star executive Carlos Ghosn, it still had as its crown jewel the technology of electric vehicles and hybrids that Fiat Chrysler wanted. The board of Renault, meeting Thursday, didn't get as far as voting on the proposal, announced last week, which would have created the world's third biggest automaker, trailing only Volkswagen AG of Germany and Japan's Toyota Motor Corp. When the French government, Renault's top shareholder with a 15% stake, asked for more time to convince Nissan, Fiat Chrysler Chairman John Elkann abruptly withdrew the offer. Although analysts say reviving the talks isn't out of the question, they say trust among the players appears to have been broken. "The other companies made the mistake of underestimating Nissan's determination to say, 'No,' " said Katsuya Takuechi, senior analyst at Mitsubishi UFJ Morgan Stanley Securities in Tokyo.

The Note, an electric car with a small gas engine to charge its battery, was Japan's No. 1 selling car, the first time in 50 years that a Nissan beat Toyota and Honda. Renault and Fiat Chrylser highlighted possible synergies that come from sharing parts and research costs as the benefits of the merger. But what Fiat Chrysler lacks and really wanted was what's called in the industry "electrification technology," Takeuchi said. With emissions regulations getting stricter around the world, having such technology is crucial. Yokohama-based Nissan makes the world's best-selling electric car Leaf. Its Note, an electric car equipped with a small gas engine to charge its battery, was Japan's No. 1 selling car for the fiscal year through March, the first time in 50 years that a Nissan model beat Toyota and Honda Motor Co. for that title. Nissan is also a leader in autonomous-driving technology, another area all the automakers are trying to innovate. "Although Nissan had no say, its cautionary stance on the merger ended up being very meaningful," Takeuchi said. Nissan has long resisted pressures from Renault for a full merger, and Japanese media reported that Renault had likely hoped its lobbying power would be boosted, if it had merged with Fiat Chrysler. But the collapse of the talks with Fiat Chrysler might mean Renault would merely focus even more on a merger with Nissan, the Asahi newspaper said Friday. Nissan Chief Executive Hiroto Saikawa told reporters late Thursday that he wanted time to find out what the Fiat Chrylser-Renault merger might mean for Nissan, calling it "moving to the next stage." He reiterated his reservations about a full merger with Renault, stressing Nissan must turn its business around first. Fiat Chrysler cited "political conditions in France" for withdrawing its offer to Renault. The French government said it had placed four conditions on the deal, and getting support from Nissan was the condition that wasn't met. The other conditions were to preserve French jobs and factories, respect the governance balance between Renault and Fiat Chrysler, and ensure participation in an electric battery initiative with Germany. Michelle Krebs, executive analyst at Autotrader in Detroit, acknowledged the proposed giant alliance had been complex. "No one ever expected it to be a cake walk to negotiate or execute," she said. "The only surprise is that it ended so soon."

Why A Renault-fca Merger Could Be Good News For Nissan, Mitsubishi

Why a Renault-FCA merger could be good news for Nissan, Mitsubishi

TOKYO — Nissan's advanced technologies including platforms and electric powertrains could give it leverage in a merger involving Renault and Fiat Chrysler, thanks to a royalty system it has with the former, two people with knowledge of the matter said. A merged Renault-Fiat Chrysler could face an extra hurdle each time it uses technology developed by Nissan or Mitsubishi Motors, while the two Japanese automakers stand to gain a client in Fiat Chrysler (FCA), one of the people said. Both sources declined to be identified because of the sensitivity of the matter. Nissan's technology, particularly in electrification and emissions reduction, could give it some sway in the $35 billion potential tie-up between Renault and FCA, even as its stake in the newly formed company would be diluted. Currently Renault SA pays less for technology developed by Nissan than the Japanese automaker pays for French technology, a third person said. This has long been a sticking point for Nissan, and an area where Nissan could seek more favorable terms. "Whenever Nissan transfers platform, powertrain or other technology to Renault, there is a margin or royalty which Renault has to pay for use of that tech," one of the people said. "In that sense, FCA, if everything went well, would become another 'client' of ours and that's good. More business for us." A Nissan spokesman declined to comment on its royalty system. The potential Renault-FCA deal has complicated the Japanese automaker's already uneasy alliance with Renault. A further deal with Fiat Chrysler looks likely at least in the near term to weaken Nissan's influence in the 20-year-old partnership. Renault owns a 43.4% stake in Nissan and is its top shareholder. Nissan holds a 15% non-voting stake in Renault and would see that diluted to 7.5% after the FCA deal, albeit with voting rights. The imbalance between the two has long rankled Nissan, which is by far the larger company.

Alliance imbalance

Renault had previously angled for a merger with Nissan but has been rebuffed by CEO Hiroto Saikawa. Securing benefits from the merger deal will be important for Saikawa, who is grappling with poor financial performance while he struggles to right the company after the ouster of former chairman Carlos Ghosn last year. By joining forces, Renault and FCA hope to consolidate what would have been two electric vehicle development programs into one, and then deploy the resulting technology across a much larger range of vehicles, reducing costs. FCA, which foresees trouble in meeting with increasingly stringent emissions regulations in both Europe and China, would likely benefit significantly from Renault powertrain technologies. Much of these technologies have been beefed up by R&D led by Nissan, the first automaker to launch a mass-market all-battery electric vehicle (EV). The Nissan Leaf is the world's top-selling EV, with sales of more than 400,000 since its launch in 2010. The company has also found unexpected success with its e-Power gasoline hybrid system. It could use its technology as a negotiating tool with Renault and FCA. Technically, any deal between Renault and FCA would not involve any structural change in Renault's confidential partnership agreement with Nissan, the Restated Alliance Master Agreement, although FCA would join Renault as a counterparty to the pact. But Nissan does stand to benefit from a more balanced capital structure in the merger. As the combined Renault-FCA company would be domiciled in the Netherlands, the French government would lose its double shareholding permitted under France's Florange Law. As a result, the French government would be left with a 7.5 percent voting stake in the new company, potentially easing a source of tension between Nissan and Paris, as the current arrangement effectively hands the government outsized influence over the Japanese automaker.

Regional competitors

There is also the issue of regional overlap. FCA and Nissan are rivals in the North American truck and SUV market, where Nissan has struggled with poor margins. "Nissan is struggling in the United States. Will pairing up with Chrysler help? Not really." said Takeshi Miyao, managing director of consultancy Carnorama. He said Nissan could seek compromises in other areas if Renault-FCA were to seek consolidation in the region. Southeast Asia, where the third member of the Renault-Nissan alliance — Mitsubishi Motors — dominates vehicle sales, could also be an area for potential horse-trading with Renault and FCA as they expand their presence in the fast-growing market. Here, Mitsubishi could negotiate hefty concessions in return for distribution in Indonesia, Thailand and other countries. "Our main market is the ASEAN countries, so we would like to know how cooperation would look in this region," Mitsubishi Motors Chairman Osamu Masuko said on Wednesday. "There are areas where making decisions may be difficult."

Nissan Tells Renault It Is 'not Opposed' To Fiat Chrysler Merger Plan

Nissan tells Renault it is 'not opposed' to Fiat Chrysler merger plan

TOKYO – Nissan on Wednesday told Renault it wasn't opposed to its partner's potential $35 billion merger with Fiat Chrysler, the Nikkei newspaper said, as the two met to hash out the future of their alliance amid a deal that could upend the auto industry. The leaders of Nissan Motor Co, France's Renault SA and junior partner Mitsubishi Motors Corp gathered at Nissan's headquarters in Yokohama for a scheduled alliance meeting - one overshadowed by Fiat Chrysler's proposal this week for a merger-of-equals with Renault. The plan, which would create the world's third-largest automaker, raises difficult questions about how Nissan would fit into a radically changed alliance. Renault Chairman Jean-Dominique Senard arrived in Japan on Tuesday to discuss the proposed tie-up with Nissan, 43.4% owned by the French automaker. "We are not opposed," the Nikkei quoted an unnamed Nissan source who had attended the meeting as saying. The person also said "many details need to be worked out" before the Japanese automaker solidifies its position on the issue, the Nikkei reported. In a statement, the alliance members confirmed that they had "an open and transparent discussion" on the proposal. The deal looks designed to tackle the costs of far-reaching technological and regulatory changes, including the drive toward electric vehicles. Nissan, which has rebuffed overtures by Renault for a merger of their own despite their 20-year alliance, was blindsided by the discussions, sources have told Reuters, stoking concerns that a deal with Fiat Chrysler could weaken Nissan's relations with Renault. The tie-up also poses an additional challenge for Nissan CEO Hiroto Saikawa, already grappling with poor financial performance and an uneasy relationship with Renault after Nissan led the ousting last year of long-standing alliance chairman Carlos Ghosn. There have long been tensions between Nissan and Renault over the imbalance of power in their alliance. Nissan, the bigger company, holds a 15% non-voting stake in the French automaker, while Renault owns 43.4% of Nissan. Ahead of Wednesday's meeting, Japanese media quoted Saikawa as telling reporters that he would look at the potential opportunities afforded by a Renault-FCA merger. Credit ratings agency Moody's said it was vital for Nissan to stabilize its partnership with Renault to expand operational synergies and improve margins. "It is unclear if the Nissan-Renault-Mitsubishi Motors alliance can advance their cooperation without resolving the cross-shareholding issue, which has been source of contention," Moody's said in the report, which followed a cut to Nissan's credit rating last week. (Reporting by Naomi Tajitsu; Editing by David Dolan and Christopher Cushing)

Fca-renault Merger Talks: France Wants Job Guarantees And Nissan On Board

FCA-Renault merger talks: France wants job guarantees and Nissan on board

PARIS — France will seek protection of local jobs and other guarantees in exchange for supporting a merger between carmakers Renault and Fiat Chrysler, its finance minister said on Tuesday, underscoring the challenges facing the plan. Separately, Renault Chairman Jean-Dominique Senard arrived in Japan to discuss the proposed tie-up with the French company's existing partner Nissan — another potential obstacle to the $35 billion-plus merger of equals. Renault and Italian-American rival Fiat Chrysler Automobiles (FCA) are in talks to tackle the costs of far-reaching technological and regulatory changes by creating the world's third-biggest automaker. Shares in both companies jumped on Monday on news of a deal that would create an industry No.3 behind Japan's Toyota and Germany's Volkswagen and target 5 billion euros ($5.6 billion) a year in savings. Renault shares were up 1.3 percent by 1030 GMT, extending gains from Monday when the stock had closed up 12 percent. Fiat shares were flat in Milan but the U.S. listed stock was indicated 8 percent higher after a public holiday on Monday. Analysts caution the companies face a challenge to win over powerful stakeholders ranging from the French and Italian governments, to trade unions and Nissan. French finance minister Bruno Le Maire told RTL radio on Tuesday the plan was a good opportunity for both Renault and the European car industry, which has been struggling for years with over-capacity and subdued demand. But he added the French government would seek four guarantees in exchange for backing a deal that would see its 15% stake in Renault reduced to 7.5% of the combined entity.

France's conditions

"The first: industrial jobs and industrial sites. I told the Renault chairman very clearly that it was the first of the guarantees I wanted from him in the opening of these negotiations. A guarantee on the preservation of industrial jobs and sites in France," said Le Maire. The minister also said France wanted to be well represented on the board of the new company, for it to be a leader in developing electric batteries, and for the deal to take place "within the framework of the alliance between Renault and Nissan." A source familiar with the matter told Reuters on Monday that Renault and FCA had given commitments about maintaining industrial jobs and sites, leaving room for white-collar and engineering layoffs as well as some plant downsizing. Also on Monday, Italian Deputy Prime Minister Matteo Salvini said Rome might need to take a stake in the combined company, balancing France's shareholding. Le Maire said he had spoken to the Japanese personally about the proposed tie-up. Asked how they had responded, he replied: "I look at the reaction of Nissan president Mr Saikawa, and it's a reaction that is open." Analysts have said Nissan, which is 43% owned by Renault and has a 15% non-voting stake in the French firm, might be reluctant to back an FCA-Renault tie-up that would probably use its technology less than the current Renault-Nissan alliance. However, Nissan CEO Hiroto Saikawa told Japanese TV on Tuesday that "strengthening the alliance and constructive discussions are forward looking, and we are open to constructive discussions." The Renault-Nissan alliance has been under strain since the arrest and ouster of its former chairman Carlos Ghosn late last year on charges of financial misconduct, with Nissan recently rebuffing a merger proposal from its partner.