High-level discussions are reportedly taking place between Renault and Fiat Chrysler (FCA) aimed at reviving the merger between the two companies, and gaining the approval of Nissan, Renault's alliance partner.
Three sources have told Reuters John Elkann, chairman of FCA, has had talks with Jean-Dominique Senard, Renault's chairman, and Thierry Bollore, the French automaker's CEO, about bringing the proposed merger between the two companies back to life.
Toby Myerson, one of Elkann's senior advisors, is reportedly heading to Nissan's headquarters in Yokohama, Japan, to have discussions with senior executives, including, possibly, Hiroto Saikawa, Nissan's CEO.
Sources indicate Nissan could back the merger if it can convince Renault to reduce its shareholding.
Renault currently has a 43% stake in Nissan, which includes voting rights, two seats on its board, and the ability to name its chairman. Nissan in turn has a 15% non-voting shareholding in Renault, although it does have seats on its board.
The power imbalance, coupled with issues related to the French government's role in Renault, as well as the fact that Nissan is the larger and more profitable of the two alliance partners, has created unease at Nissan's HQ and significant friction between the automakers.
It's not clear how much of Nissan Renault could relinquish without needing the merger proposal to be restructured. As one source told Reuters, the French carmaker's significant stake in Nissan is "an intrinsic part of the value of Renault".
A second proposal to help win Nissan's approval would see the Japanese automaker granted a call option to increase its 7.5% voting stake in the merged FCA Renault.
Two weeks ago Fiat Chrysler submitted a friendly proposal for a 50/50 merger, valued at €32.7 billion ($52.9 billion), between it and Renault.
FCA withdrew the merger offer last week after the French government, Renault's largest and most influential shareholder, wanted to continue deliberations and seek Nissan's approval for the deal.
Nissan's two representatives on Renault's board had abstained from voting on the merger.