Exclusive: FCA discusses improving the Renault merger offer in order to gain French support

PARIS (Reuters) – Fiat Chrysler is discussing a special dividend and enhanced job guarantees to convince the French government to support the automakers' merger plan, sources close to the talks said.

This improved offer, if it was formalized and accepted, would also result in giving the headquarters of its board of directors a head office in France and the French state, announced Sunday to Reuters two people aware of the situation. ;case.

CFA spokesman Shawn Morgan declined to comment. The French government, Renault's largest shareholder with a 15% stake, also declined to comment. A spokesman for Renault did not respond to calls and messages asking for comments.

The Italian-American FCA has engaged in intensive discussions with Renault and the French government about the $ 35 billion merger proposal presented last Monday to create the world's third largest automaker.

The concessions under discussion are not final and depend on other aspects of an emerging compromise agreement, the two sources warned.

However, they increase the chances that the proposed merger will be approved by Renault's board of directors, where the French state holds two seats. The council meets again on Tuesday.

Some French badysts and executives have expressed doubts about the € 5 billion cost savings and so-called investments, and the fact that this proposal represents fair treatment for Renault's shareholders.

A Renault dividend would enhance the valuation in their favor, with a proposed dividend of 2.5 billion euros to FCA shareholders. The sources did not specify the potential size of a Renault payment.

According to the merger plan submitted on Monday, the two carmakers would be acquired by a publicly traded Dutch holding company, whose ownership would be shared equally between current FCA shareholders and Renault shareholders, after payment of the fees. a special dividend.

FCA had offered to locate the group's operational headquarters in a neutral city, probably London, but said it was ready to base it in the Paris region, responding to a key demand from the French government, the two sources said.

The French government should also be given a seat on the board of directors, reflecting its 7.5% stake in the merged company, the public said.

Nissan, whose 15% stake in its French partner will also be diluted to 7.5% of the new group, is given a seat on the board as part of the plan unveiled on May 27th.

Renault's blue-collar jobs and Renault's French industrial sites would also be extended to four years compared with the two proposals initially proposed under the compromise under discussion, the sources added.

The pro-business French government and the Italian populist administration support the merger in principle, but tense relations between the two could still frustrate the agreement if one of the parties feels disadvantaged.