Carmakers FCA and Renault to go public on tie-up talks
By Giulio Piovaccari and Laurence Frost MILAN/PARIS (Reuters) - Fiat Chrysler and Renault are set to confirm tie-up talks on Monday, with the board of the French carmaker called to an early morning meeting to discuss the situation.
By Giulio Piovaccari and Laurence Frost
MILAN/PARIS (Reuters) - Fiat Chrysler and Renault are set to confirm tie-up talks on Monday, with the board of the French carmaker called to an early morning meeting to discuss the situation.
It comes after news broke over the weekend that two of the world's leading car companies are in talks on a comprehensive global combination that could address some of the main weaknesses of both.
The plan under discussion would involve some transfer of equity, according to a source close to the discussions.
Renault Chairman Jean-Dominique Senard presented an FCA-Renault merger plan to French Finance Minister Bruno Le Maire on Friday, Les Echos reported on its website. The French government has a 15 percent stake in Renault.
The deal being discussed would include guarantees covering corporate governance and employment in France and Italy, the French daily said.
Pressure for consolidation among carmakers has grown with the challenges posed by electrification, tightening emissions regulations and expensive new technologies being developed for connected and autonomous vehicles.
Earlier this year FCA Chairman John Elkann - a member of Italy's Agnelli dynasty that controls the company - stressed the family's commitment to the automotive industry. But he also added that they were prepared to take "bold and creative decisions" to help build a solid and attractive future for the company.
A source said earlier an announcement from Italo-American FCA could provide some concrete although initial details but added the situation was still "fluid".
A separate source with direct knowledge of the situation confirmed that the Renault board will meet on Monday morning at 0800 local time (0600 GMT) to discuss the issue.
FCA has a highly profitable North American RAM trucks business and Jeep brand but has been losing money in Europe, where it may also struggle to keep pace with looming carbon dioxide emissions curbs.
Renault, by contrast, is an electric-car pioneer with relatively fuel-efficient engine technologies and a strong presence in emerging markets, but no U.S. business.
Any tie-up would likely face political and workforce hurdles, particularly in Italy. However, most of FCA's European plants are running below 50 percent capacity.
A deal between FCA and Renault would not preclude a consolidation of Renault's alliance with Japanese carmaker Nissan, a source told Reuters on Saturday.
The Renault-Nissan partnership, underpinned by cross shareholdings, has been strained by the scandal surrounding former chairman Carlos Ghosn, who was ousted after his arrest last year.
Speculation about the future of Fiat Chrysler, often seen as a potential M&A target, intensified after the sudden death of long-serving former CEO Sergio Marchionne almost one year ago.
In October last year, just after three months he was picked to replace Marchionne, new CEO Mike Manley agreed to sell FCA's car parts unit Magneti Marelli to Japan's Calsonic Kasnsei, owned by U.S. private equity firm KKR.
The sale was completed early this month for 5.8 billion euros.
According to reports earlier this year the manufacturer had also restarted talks with France's PSA Group - which have been a recurrent theme over the years.
Fiat Chrysler and Renault together would have a combined market capitalisation of more than 32 billion euros ($36 billion) and total global sales of 8.7 million vehicles.
Fiat Chrysler has a valuation of just under 18 billion euros and Renault around 14.4 billion
An alliance that included Nissan would vault the ensemble to the rank of global No.1 carmaker with 13.8 million annual sales. It would also maintain a foothold in China, where both FCA and Renault are marginal players.
($1 = 0.8927 euros)
(Reporting by Laurence Frost, Gilles Guillaume and Inti Landauro in Paris, Pamela Barbaglia in London and Giulio Piovaccari in Milan; Editing by Keith Weir)
This story has not been edited by Firstpost staff and is generated by auto-feed.
By Robin Emmott and John Irish | BRUSSELS/PARIS BRUSSELS/PARIS France and Germany will agree to a U.S. plan for NATO to take a bigger role in the fight against Islamic militants at a meeting with President Donald Trump on Thursday, but insist the move is purely symbolic, four senior European diplomats said.The decision to allow the North Atlantic Treaty Organization to join the coalition against Islamic State in Syria and Iraq follows weeks of pressure on the two allies, who are wary of NATO confronting Russia in Syria and of alienating Arab countries who see NATO as pushing a pro-Western agenda."NATO as an institution will join the coalition," said one senior diplomat involved in the discussions. "The question is whether this just a symbolic gesture to the United States
BEIJING Chinese President Xi Jinping on Wednesday called for greater efforts to make the country's navy a world class one, strong in operations on, below and above the surface, as it steps up its ability to project power far from its shores.China's navy has taken an increasingly prominent role in recent months, with a rising star admiral taking command, its first aircraft carrier sailing around self-ruled Taiwan and a new aircraft carrier launched last month.With President Donald Trump promising a US shipbuilding spree and unnerving Beijing with his unpredictable approach on hot button issues including Taiwan and the South and East China Seas, China is pushing to narrow the gap with the U.S. Navy.Inspecting navy headquarters, Xi said the navy should "aim for the top ranks in the world", the Defence Ministry said in a statement about his visit."Building a strong and modern navy is an important mark of a top ranking global military," the ministry paraphrased Xi as saying.