Fiat Chrysler is attempting to convince the French government to approve and back its proposal for merger with the French auto maker Renault in which the French government is a major shareholder and the company is contemplating giving Renault a special dividend and stronger job guarantees, according to reports quoting sources.
If the deal finally gets through all of the hurdles, the new combined entity would be headquartered in France and a seat on its board would be given to the French state, said reports quoting two sources who have knowledge of the matter.
There was no comment made by FCA spokeswoman Shawn Morgan to the media.
With a 15 per cent share, the French government is the biggest shareholder of Renault. There was no comment available from any government source, or from Renault.
Currently there are hectic negotiations between the Italian-American auto maker FCA and Renault and the French government to get the proposed $35 billion merger proposal through which would result in the creation of the third largest car maker of the world.
The reports also claimed that the additional offers made by Renault are only temporary in nature because they have not been confirmed yet and is dependent on other aspects of a deal that is ongoing.
The additional offers from FCE however could have the impact of increasing the chances of the proposed merger getting through the board of Renault - with two members on the board belonging to the French government.
The two auto companies have claimed that a merger would result in 5 billion euros ($5.6 billion) in cost and investment savings which have been contested by some analysts and French industry leaders. They have also expressed doubts whether the merger would cut a fair deal for the shareholders of Renault.
A 2.5 billion euro proposed dividend to FCA shareholders would be better balanced in terms of valuation in favor of Renault shareholders by a dividend to Renault. The amount possible of dividends to Renault was not disclosed by the reports and the sources.
Under the proposed merger plan which was presented last week, Renault and FCA is planned to be acquired by a listed Dutch holding company which would have a split ownership divided equally between the current shareholders of FCA and Renault after making any special dividend payments.
Under the original proposal, the headquarters of the new entity was proposed to be set in a neutral city such as London. The FCA has now indicated that the base of the merged company could be set up in the greater Paris area which was one of the major demands of the French government.
The reports, citing source information, claimed that the French government would possess 7.5 percent stake in the merged company and as such would likely be given an seat on the board of the new entity.
The merger plan also proposes the allocation of a seat on the board of the new entity for Japanese auto maker Nissan and an alliance partner of Renault, because it would ultimately have a 7.5 per cent stake in the new group from the 15 per cent its currently owns in Renault.
(Source:www.reuters.com)
If the deal finally gets through all of the hurdles, the new combined entity would be headquartered in France and a seat on its board would be given to the French state, said reports quoting two sources who have knowledge of the matter.
There was no comment made by FCA spokeswoman Shawn Morgan to the media.
With a 15 per cent share, the French government is the biggest shareholder of Renault. There was no comment available from any government source, or from Renault.
Currently there are hectic negotiations between the Italian-American auto maker FCA and Renault and the French government to get the proposed $35 billion merger proposal through which would result in the creation of the third largest car maker of the world.
The reports also claimed that the additional offers made by Renault are only temporary in nature because they have not been confirmed yet and is dependent on other aspects of a deal that is ongoing.
The additional offers from FCE however could have the impact of increasing the chances of the proposed merger getting through the board of Renault - with two members on the board belonging to the French government.
The two auto companies have claimed that a merger would result in 5 billion euros ($5.6 billion) in cost and investment savings which have been contested by some analysts and French industry leaders. They have also expressed doubts whether the merger would cut a fair deal for the shareholders of Renault.
A 2.5 billion euro proposed dividend to FCA shareholders would be better balanced in terms of valuation in favor of Renault shareholders by a dividend to Renault. The amount possible of dividends to Renault was not disclosed by the reports and the sources.
Under the proposed merger plan which was presented last week, Renault and FCA is planned to be acquired by a listed Dutch holding company which would have a split ownership divided equally between the current shareholders of FCA and Renault after making any special dividend payments.
Under the original proposal, the headquarters of the new entity was proposed to be set in a neutral city such as London. The FCA has now indicated that the base of the merged company could be set up in the greater Paris area which was one of the major demands of the French government.
The reports, citing source information, claimed that the French government would possess 7.5 percent stake in the merged company and as such would likely be given an seat on the board of the new entity.
The merger plan also proposes the allocation of a seat on the board of the new entity for Japanese auto maker Nissan and an alliance partner of Renault, because it would ultimately have a 7.5 per cent stake in the new group from the 15 per cent its currently owns in Renault.
(Source:www.reuters.com)