|Bid||0.00 x 0|
|Ask||0.00 x 0|
|Day's Range||43.33 - 44.25|
|52 Week Range||43.22 - 64.20|
|Beta (3Y Monthly)||1.65|
|PE Ratio (TTM)||5.19|
|Earnings Date||Feb 14, 2019 - Feb 18, 2019|
|Forward Dividend & Yield||3.55 (7.99%)|
|1y Target Est||84.17|
Communication about availability - Renault sales figures for October 2019 Boulogne, November 19, 2019 Renault announces that its sales figures report for October 2019 is now.
(Bloomberg) -- Carlos Ghosn’s arrest in Tokyo a year ago and his fall from the apex of the automotive world was stunning. The deposed executive, accused of crimes ranging from falsifying documents to diverting Nissan Motor Co. money for personal use, has proclaimed his innocence on all charges.The fall shook the alliance Ghosn created between Nissan, Renault SA and Mitsubishi Motors Corp. to its core. As he prepares for a trial that will probably start in the first half of 2020, the three-way partnership has moved on.Nissan had its own share of turmoil over the past year. Profits dropped to decade lows, the relationship with top shareholder Renault was damaged and Ghosn’s loyalist-turned-accuser Hiroto Saikawa was ousted as chief executive.Here’s a rundown of key developments:Nov. 12Nissan slashes its sales and profit forecast for the year through March and withdraws its dividend outlook, dealing an unexpected blow to top shareholder Renault.Oct. 31Fiat Chrysler Automobiles NV agrees to merge with PSA Group, adding pressure to Renault to fix its relationship with Nissan. Renault had sought and failed to reach a merger agreement with Fiat earlier in the year.Oct. 24Ghosn’s lawyers enter pleas of not guilty on all charges, saying he’s the victim of a conspiracy between prosecutors, the government and Nissan to bring about his downfall.Oct. 9Nissan appoints Makoto Uchida, head of its China joint venture, as CEO effective Dec. 1, along with new Chief Operating Officer Ashwani Gupta.Sept. 23Nissan, Ghosn and Greg Kelly agree to pay fines to settle charges brought by U.S. regulators, without admitting or denying wrongdoing.Sept. 10Nissan’s board ousts Saikawa over his role in the excessive pay issue. His last day at the company is Sept. 16.July 25Nissan’s operating profit drops to a decade low and the company announces a restructuring that will involve 12,500 job cuts.June 11Kelly tells magazine Bungei Shunju about the existence of stock-linked compensation for CEO Saikawa, Ghosn’s handpicked successor, that resulted in excess pay in 2013.June 7Merger discussions between Renault and Fiat, which would have created the world’s third-largest carmaker, collapse after Nissan withholds support for the deal.May 23Pre-trial proceedings begin in Tokyo, mainly to narrow the scope of the charges.April 25Ghosn’s lawyers post a bond of 500 million yen ($4.6 million) to obtain his release. A court set the bond on condition he lives at a registered domestic address, doesn’t leave the country, and adheres to requirements meant to prevent the destruction of any evidence.April 24Nissan cuts its preliminary operating profit for the year ended March 31, marking the first time in a decade it earned less than its French partner Renault.April 22Prosecutors indict Ghosn on fresh charges of misdirecting Nissan’s money for his personal use, saying the carmaker lost $5 million funneled into accounts controlled by him. These represent the most serious allegations so far against Ghosn.Nissan also files a criminal complaint to prosecutors, alleging Ghosn drew on the automaker’s funds for his own use.April 19French magazine L’Express reports unidentified people saying Ghosn spent $30,000 of Nissan money on luxury items such as Louis Vuitton, Hermes and Ermenegildo Zegna products.April 16Ghosn is said to have improperly charged Renault for a 3,000-euro ($3,320) scooter purchased in 2018.April 13Ghosn’s son denies his startup received funds via an investment company that is alleged to have obtained money from Nissan.April 9Lawyers of Ghosn issue a video of him recorded before he was detained, where he speaks of “backstabbing” by executives who played a “very dirty game.” He doesn’t identify the executives by name, and repeats his claim of innocence.April 8Nissan shareholders vote Ghosn out as a board director, stripping him of his last title at the automaker.Among allegations, Ghosn is accused of siphoning off $5 million of $15 million that Nissan sent to an overseas distributor between 2015 and 2018, according to Japanese prosecutors.April 4Prosecutors rearrest Ghosn at his Tokyo apartment, saying he sent Nissan’s money to accounts he controlled and that he took a combined $15 million in three instances beginning in 2015.Ghosn calls his detention “outrageous and arbitrary,” and says it’s “part of another attempt by some individuals at Nissan to silence me by misleading the prosecutors.” He pledges his innocence of the “groundless charges and accusations.”April 3Renault says certain expenses that Ghosn incurred are a “source of concern, as they involve questionable and concealed practices and violations of the group’s ethical principles.” The automaker also raises potential issues concerning payments to one of its distributors in the Middle East.April 2Ghosn’s lawyer, Junichiro Hironaka, says he should be tried separately from the automaker and accused accomplice Kelly.March 28An external corporate-governance panel says Saikawa signed off on Ghosn’s retirement package. A representative for Ghosn says the deposed executive “acted at all times with the full authority of the Board and its shareholders.”March 11A Tokyo court rejects Ghosn’s request to attend a Nissan board meeting on March 12 to discuss the alliance with Renault and Mitsubishi Motors, saying his attendance would violate terms of bail forbidding him from contacting people involved in the case.March 6Ghosn leaves the Tokyo detention center after posting one of the highest bails in Japan’s legal history. Conditions include an agreement to remain in Japan, having cameras installed at the entrance and exit of his home, restrictions to using his mobile phone, and having no access to the internet.March 5A Tokyo court grants Ghosn bail at 1 billion yen on his third application. Ghosn reiterates his innocence and again calls the accusations “meritless and unsubstantiated.”March 4Hironaka calls Ghosn’s long detention “extremely unfair” and hints at the involvement of a “higher power.” Lawyers for Ghosn’s wife and children say the family is appealing to the UN Working Group on Arbitrary Detention for help in securing his release.Feb. 20Hironaka holds his first press conference as Ghosn’s lawyer, in which he calls the case “bizarre” and alludes to it being a result of a conspiracy inside the automaker.Feb 13Ghosn replaces his legal team with one led by Hironaka, famous for his representation in prominent cases including the successful defense of a former senior bureaucrat against corruption charges.The International Federation for Human Rights says the denial of Ghosn’s access to a lawyer during interrogation and his prolonged detention reflect some “serious failings” in Japan’s criminal-justice system.Feb. 7Ghosn may have made improper use of a Renault sponsorship deal to pay for his wedding party at the Chateau de Versailles, and received a “personal benefit” worth 50,000 euros, the French carmaker says. This is the first time Renault disclosed possible improprieties by its former chief.Jan. 30Ghosn says his arrest for alleged financial crimes is the result of a “plot” by Nissan executives and a “distortion of reality.” Nissan says its own investigation unveiled “substantial and convincing evidence of misconduct.”Jan. 29French President Emmanuel Macron tells Japanese Prime Minister Shinzo Abe that Ghosn’s detention is “too long and too hard.”Jan. 23Ghosn resigns as chairman and CEO of Renault.Jan. 21Ghosn makes another application for bail.Jan. 18Nissan says Ghosn improperly received 7.8 million euros from a joint venture with Mitsubishi Motors.Jan. 15Tokyo District Court turns down Ghosn’s bail application. The rejection means he will have to stay in jail for at least another two months.Jan. 11Prosecutors indict Ghosn again, this time for aggravated breach of trust.Jan. 10Ghosn comes down with a fever in jail, prompting authorities to halt his interrogation.Jan. 8Ghosn attends a hearing at a court in Tokyo in his first public appearance since being arrested, with handcuffs, plastic slippers and a rope around his waist. He rejects prosecutors’ allegations, saying he has been “wrongly accused and unfairly detained based on meritless and unsubstantiated accusations.”Dec. 26Ghosn’s aide Kelly is released from jail.Dec. 25Prosecutors appeal a Tokyo District Court decision to grant Kelly bail, set at 70 million yen, which he posts in cash.Dec. 21Japanese prosecutors rearrest Ghosn on more serious allegations of financial misconduct, saying he is suspected of damaging Nissan with his own unprofitable investments.Dec. 20A Tokyo court refuses a request by prosecutors to extend the detentions of Ghosn and Kelly by 10 days. The prosecutors’ appeal against this was also rejected, bolstering his odds for bail.Dec. 10Ghosn and Nissan are indicted for understating his income by about $43 million. Kelly is also indicted for aiding Ghosn in underreporting the income.Nov. 28Ghosn denies reports he passed on personal trading losses to Nissan.Nov. 26Mitsubishi Motors ousts Ghosn as chairman.Nov. 22Nissan dismisses Ghosn as chairman and strips Kelly of his representative-director role. A company official says Ghosn was provided with six houses, including in Tokyo and New York.Nov. 21Renault names Thierry Bollore interim deputy CEO.Nov. 19Ghosn is arrested in Tokyo for alleged financial crimes along with Nissan representative director Kelly. Nissan CEO Saikawa expresses disappointment and indignation at Ghosn’s alleged misconduct, including using company funds for personal investments and misusing corporate assets.To contact the reporter on this story: Kae Inoue in Tokyo at firstname.lastname@example.orgTo contact the editors responsible for this story: Young-Sam Cho at email@example.com, Reed Stevenson, Will DaviesFor more articles like this, please visit us at bloomberg.com©2019 Bloomberg L.P.
Moody's Investors Service ("Moody's") has completed a periodic review of the ratings of RCI Banque and other ratings that are associated with the same analytical unit. The review was conducted through a portfolio review in which Moody's reassessed the appropriateness of the ratings in the context of the relevant principal methodology(ies), recent developments, and a comparison of the financial and operating profile to similarly rated peers. This publication does not announce a credit rating action and is not an indication of whether or not a credit rating action is likely in the near future.
On Tuesday, Nissan (OTC: NSANY ) posted its earnings on November 12, clearly showing that the nightmare that started with Ghosn's arrest is not nearly over. The Japan's second biggest automaker's shares ...
Renault is set to finalise a shortlist of candidates for its new chief executive in the coming days with Seat boss Luca de Meo the frontrunner for the job after the French carmaker ousted its former head last month. Renault has narrowed its hunt to replace Thierry Bolloré to a handful of candidates, according to people familiar with the matter. Former Airbus executive Fabrice Brégier, chief executive of auto parts maker Faurecia Patrick Koller and Renault’s interim boss Clotilde Delbos are also in the running.
Renault will have soon drawn up a shortlist of candidates for chief executive officer but there is no rush, the French carmaker's chairman told a German newspaper. Renault ousted chief executive Thierry Bollore in October as the carmaker and its Japanese partner Nissan have tried to rekindle their relationship after the arrest of the alliance's former head Carlos Ghosn.
Renault's interim chief executive Clotilde Delbos has applied to take the job on a permanent basis, two sources familiar with the matter said, as the French carmaker edges toward a shortlist likely to also feature several external candidates. Financial chief Delbos was propelled to the job on a temporary basis after CEO Thierry Bollore's ousting in mid-October, as Renault and its Japanese partner Nissan clear the decks of managers closely associated with the Carlos Ghosn era. Ghosn, who chaired the alliance between the two companies, was arrested in Japan a year ago on financial misconduct charges he denies, and Renault and Nissan have been striving to repair their strained ties since.
Information concerning the total number of voting rights and shares, provided pursuant to article L. 233-8 II of the Code de commerce (the French Commercial Code) and the.
(Bloomberg) -- Nissan Motor Co. withdrew its dividend outlook and said it’s now undecided on a payout, dealing an unexpected blow to top shareholder Renault SA.The Japanese automaker, which slashed its profit and sales outlook for the current fiscal year to March, had already cut its dividend earlier this year. On Tuesday, it withdrew its outlook for a 40 yen-per-share payout for the year in a filing to the Tokyo Stock Exchange.Nissan shares slipped as much as 4.5% in early trading in Tokyo on Wednesday. The stock is down 22% this year. Renault shares fell 1% in Paris trading Tuesday, giving them a year-to-date decline of 16%.The French automaker stands to lose the most because it owns 43% of Nissan. The Yokohama-based manufacturer is conserving cash as it embarks on 12,500 job cuts globally, and cost reductions aren’t happening soon enough to blunt the impact of weaker demand, higher raw materials costs and unfavorable currency trends. Makoto Uchida, who takes over as chief executive officer next month, inherits the monumental task of restoring Nissan’s brand image and rolling out new cars that appeal to retail customers.“Renault’s profits aren’t very good either, so less dividend means reduced cash flow and flexibility,” said Tatsuo Yoshida, a Bloomberg Intelligence analyst.Nissan will contribute 233 million euros ($257 million) to Renault’s third-quarter earnings, lower than the 384 million-euro contribution a year ago, the French carmaker said in a statement Tuesday. Renault received 784 million euros in dividends from Nissan for 2018, the company has reported.New ManagementStephen Ma, Nissan’s recently appointed chief financial officer, said in a briefing in Tokyo that the new CEO and management team will provide an update on the dividend once they are in place starting next month.Renault last month reduced its financial guidance for 2019, citing deteriorating results in markets including Turkey and Argentina, and spending on research and development. It embarked on its own search for a new CEO after ousting Thierry Bollore.Back in May, Nissan had cut its annual dividend to 40 yen from 57 yen per share, marking its first reduction since payouts were suspended in 2009.Tuesday’s surprise announcement on the payout underscores Nissan’s struggles as it seeks to get back on track almost a year after the arrest of former Chairman Carlos Ghosn.“This was always a possibility with Nissan slowing,” said Tom Narayan, an analyst at RBC Capital Markets in London. “Renault has enough cash to weather the drop in dividend earnings from Nissan.”For the fiscal year to March, Nissan’s operating profit will be 150 billion yen ($1.4 billion), below the prior forecast for 230 billion yen and just short of the analysts’ average projection for 158 billion yen. The revenue outlook was cut to 10.6 trillion yen, compared with the prior forecast for 11.3 trillion yen.Slumping SalesNissan joins Honda Motor Co. and Mazda Motor Corp. in cutting profit and sales outlooks for the year, as they struggle to sell cars in the U.S. and Europe. Global light vehicle production is on track to expand less than 1% to 94.5 million units, according to IHS Markit. Sales in China, South Asia and South America are helping to make up for declining volumes in more mature markets, the research firm said.For the latest quarter ended September, the manufacturer reported an operating profit of 30 billion yen, compared with analysts’ prediction for 57 billion yen. For the quarter, Nissan reported sales slightly below the estimate for 2.64 trillion yen.“Another quarter of low profits after an already weak first quarter means the downward revision was inevitable,” Yoshida said.Among Japanese carmakers, Toyota Motor Corp. has been the exception, joining Volkswagen AG and Ford Motor Co. in reporting better-than-anticipated results. Cost controls have helped Toyota maintain profits ahead of projections, even while it invests heavily in an industry undergoing a tectonic shift to electrification and self-driving automobiles.Ghosn SagaThe results are beginning to overshadow Nissan’s other big headache, the charges against Ghosn on alleged financial crimes. Sluggish profits, stuck near a decade low, also weaken the Japanese company’s position in its three-way carmaking alliance. After years of sales incentives that eroded margins and pushing businesses to buy cars, Nissan needs to rebuild its brand image and focus on appealing to retail customers.Ghosn, who has denied all charges, is preparing for the start of his trial next year.Uchida formally takes over from Dec. 1, following the September resignation of Hiroto Saikawa over issues related to overcompensation of income. He will work alongside new Chief Operating Officer Ashwani Gupta and Jun Seki, the new deputy COO.Nissan will hold an extraordinary shareholder meeting on Feb. 18, where investors will vote on adding Uchida, Seki, Gupta and Renault director Pierre Fleuriot to the board. Bollore and Saikawa will leave the body.Uchida, Nissan’s third CEO since 2017, joined Nissan in 2003 from metals and machinery company Nissho Iwai Corp. He was most recently in charge of the Japanese automaker’s operations in China.(Updates with Nissan shares in third paragraph)\--With assistance from Kae Inoue, Tsuyoshi Inajima, Siddharth Philip and Ania Nussbaum.To contact the reporter on this story: Shiho Takezawa in Tokyo at firstname.lastname@example.orgTo contact the editors responsible for this story: Young-Sam Cho at email@example.com, Reed Stevenson, Frank ConnellyFor more articles like this, please visit us at bloomberg.com©2019 Bloomberg L.P.
Moody's Investors Service ("Moody's") has completed a periodic review of the ratings of AB Volvo and other ratings that are associated with the same analytical unit. The review was conducted through a portfolio review in which Moody's reassessed the appropriateness of the ratings in the context of the relevant principal methodology(ies), recent developments, and a comparison of the financial and operating profile to similarly rated peers. This publication does not announce a credit rating action and is not an indication of whether or not a credit rating action is likely in the near future.
Sales of new cars in Russia fell 5.2% year-on-year in October to 152,057 units, after a 0.2% decline in the previous month, the Association of European Businesses (AEB) said on Thursday. "Total market sales in October underachieved last year's result by 5.2%, firmly keeping the market on the path of a slow but continuous erosion of the much-needed volume gains secured in the years 2017-2018," Joerg Schreiber, chairman of the AEB Automobile Manufacturers Committee, said in a statement. The AEB said last month it expected sales of new cars to fall 2.2% in Russia in 2019.
(Bloomberg) -- Want the lowdown on European markets? In your inbox before the open, every day. Sign up here.PSA Group and Fiat Chrysler Automobiles NV’s plan to combine into the world’s fourth-largest automaker will face a laundry list of challenges, with the bleak outlook for Europe near the top.The Peugeot car manufacturer and Fiat mapped out an accord Thursday for a 50-50 Netherlands-based holding company to be headed by PSA Chief Executive Officer Carlos Tavares. They said the deal would lead to 3.7 billion euros ($4.1 billion) in annual synergies without factory closures.Investors sent PSA shares tumbling as much as 14% after digesting the details, which show the French carmaker paying a premium of around 32%. Fiat shares rose as much as 11%.Read more: Plunging Peugeot Shows Who the Buyer Is in Merger of Equals (1)The combination would create a global powerhouse and leave Tavares, who has successfully turned around PSA and the loss-making Opel brand it acquired, to figure out how to integrate Fiat’s struggling operations in Europe. The Italian-American manufacturer published earnings Thursday that showed a widening loss in the region.“Fiat-Chrysler is in a very bad situation” in Europe, said Jean-Pierre Corniou, a partner at SIA consultancy in Paris. Only the American brands, RAM and Jeep are attractive, and the Fiat plant utilization rate is around 50% in some parts of Italy, he said.The contrast with PSA is striking. Sales of Fiat Chrysler branded cars including Fiat, Jeep, Lancia, Chrysler, Alfa Romeo and Maserati, fell 10% in Europe during the first nine months of 2019, based on data from the European Automobile Manufacturers Association. At the French carmaker, the second-largest in sales in the region, they were little changed, against an industry decline of 1.6%.The plan for their tie-up is unfolding at an exacting time for global car manufacturers who are having to grapple with a deepening industry slump and a wall of investment required for new technologies.The deal would bring together the billionaire Agnelli clan in Italy and the Peugeot family of France. Yet their deep national roots, along with the French government’s 12% stake in PSA, will make slimming down all the more difficult.France is one of the biggest shareholders of PSA, and while the government has signaled support for a deal, it has also warned it would scrutinize the jobs impact and governance structure of the new company.Italian Industry Minister Stefano Patuanelli also said the government would make sure the deal and expected cost cuts don’t affect jobs in Italy.Read More: Five Reasons Why France Is Backing a Fiat-Peugeot MergerThe combination makes economic and strategic sense, but “there are significant hurdles to overcome and execution risks,” Oddo BHF analysts wrote in a note. These include headcount and under-utilized plants in Europe as well as the challenge of gaining antitrust clearance for a company that would have a strong presence in France, Italy and Spain, they said.Looming large over operations in Europe are tougher rules on emissions that kick in next year. Carmakers’ fleets will have to comply with stricter caps, leaving Fiat vulnerable to future fines. The Italian-American company is a laggard on low-emissions technology whereas PSA plans to introduce seven electric vehicles by 2021 and offer either electric or hybrid versions of all models by 2025.Still, Fiat brings PSA a long-sought presence in North America, a market that’s traditionally been more profitable for the car industry. Tavares also has a track record of turning around European automotive operations.“Tavares’ playbook has been to take on loss making businesses and fix them, rapidly,” Bernstein analyst Max Warburton wrote in a note. “We believe he can achieve something similar at Fiat in Europe.”PSA and Fiat said they aim to reach a binding memorandum of understanding in the coming weeks. Goldman Sachs, D’Angelin & Co and Sullivan & Cromwell are advising Fiat Chrysler. Perella Weinberg and Mediobanca’s Messier Maris are advising PSA. The Peugeot family is advised by Zaoui & Co and Lazard is advising Exor.\--With assistance from Gabrielle Coppola.To contact the reporters on this story: Ania Nussbaum in Paris at firstname.lastname@example.org;Daniele Lepido in Milan at email@example.comTo contact the editors responsible for this story: Anthony Palazzo at firstname.lastname@example.org, ;Kenneth Wong at email@example.com, Tara Patel, Frank ConnellyFor more articles like this, please visit us at bloomberg.com©2019 Bloomberg L.P.
Investors poured a bucket of cold water on Peugeot Thursday, sinking the French carmaker’s share 13% after digesting the first details of the group’s planned merger with Italian-American rival Fiat Chrysler. The day before news of the merger plan surfaced, Fiat’s (IT:FCA) market capitalisation stood at under €19 billion and Peugeot (FR:UG) was worth 22.5 billion. When both companies had initiated their first talks around the beginning of the year, even before Fiat decided to try a merger with Renault, (FR:RNO) Fiat was worth roughly the same amount but Peugeot was then only valued at €16 billion.
MILAN/PARIS, Oct 30 (Reuters) - Fiat Chrysler and Peugeot owner PSA are in talks to combine and create a $50 billion giant better placed to tackle a host of costly technological and regulatory challenges facing the auto industry. The move comes less than five months after merger talks between FCA and French carmaker Renault foundered, with the U.S.-Italian group blaming intervention from French government officials. PSA had revenue of 74 billion euros ($82 billion) last year when it sold 3.9 million vehicles.
(Bloomberg Opinion) -- Right now is a highly opportune moment for PSA Group boss Carlos Tavares to negotiate a merger with rival European carmaker Fiat Chrysler Automobiles NV. Shares in PSA, the owner of Peugeot, have had a great run in recent months, making them a strong deal-making currency. The flip side is that this is a reason for shareholders in Fiat to demand that any “merger of equals” actually includes a premium for them.The two carmakers have relatively similar market capitalization but the precise details matter. Crunch the duo together at their closing market values on Tuesday and Peugeot shareholders would deserve to own 55% of the combination. The snag is they would then enjoy more than half of the future value creation from a deal. That’s a bit unfair: It takes two to tango. This could be solved by giving each side 50% ownership, but shrinking Peugeot via a big dividend ahead of the deal closing. That way each side would contribute an equal amount of equity value, and own and equal share of the bigger group.But is it possible such an arrangement would still be unfair? Fiat shareholders, including the billionaire Agnelli clan, might think so based on what they’re putting in. For starters, Fiat’s sales and profits are bigger than Peugeot’s. There’s also an argument that Fiat’s share-price upside may be higher too.Fiat’s valuation is markedly lower than Peugeot’s on the common profit-multiple measures. That valuation gap, and the difference in the pair’s market values, has widened in recent months as Peugeot stock has rallied. Meanwhile, the average analyst price target on Fiat shares is more than 20% higher than where the shares closed Tuesday. Peugeot shares were pretty much at their target price.On top of that, there’s the question of who will be running the show. It’s likely Tavares will be the driving force of the combination. This risks looking and feeling like a Peugeot takeover of Fiat.The remedy for such concerns would be to give Fiat shareholders a bit more than what they appear to put in. There’s a precedent: The proposed merger between Fiat and rival French carmaker Renault SA from May. In those talks, Fiat was the larger partner based on prevailing market capitalizations, and so the plan was for a Fiat special dividend beforehand to bring it closer to a 50:50 deal. But even then, Renault shareholders would have gotten a slight premium. The terms were designed to placate feelings that Renault was chronically undervalued.Tavares should get the idea. Back then, musing from the sidelines in an internal memo to Peugeot staff, he called the proposed Renault deal a virtual takeover by Fiat. And when a merger becomes a takeover, a premium is paid. Fiat needed to address the concern that it was getting Renault on the cheap. Peugeot may now need to do the same with Fiat.To contact the author of this story: Chris Hughes at firstname.lastname@example.orgTo contact the editor responsible for this story: Melissa Pozsgay at email@example.comThis column does not necessarily reflect the opinion of the editorial board or Bloomberg LP and its owners.Chris Hughes is a Bloomberg Opinion columnist covering deals. He previously worked for Reuters Breakingviews, as well as the Financial Times and the Independent newspaper.For more articles like this, please visit us at bloomberg.com/opinion©2019 Bloomberg L.P.
Earlier this year a proposed merger between Fiat Chrysler and Renault failed because of the French government’s clumsiness and its last-minute fears that the deal would further complicate the French carmaker’s delicate “alliance” with Nissan. Now Fiat (IT:FCA) has predictably turned to another French carmaker, Peugeot (FR:UG) , and the two companies have confirmed The Wall Street Journal’s scoop that they have engaged in talks. The merger, which would be based on an all-share transaction, looks simpler to achieve than the Renault deal because Peugeot is not saddled with a contentious imbrication with another carmaker.
(Bloomberg Opinion) -- The automotive M&A carousel is taking another turn, with Peugeot SA and Fiat Chrysler Automobiles NV hopping aboard this time. The two companies confirmed on Wednesday that they are in talks about a potential merger that would create a $47 billion auto giant. This comes just a few months after Fiat abandoned talks to merge with Peugeot’s French rival Renault SA. And yet the news isn’t the least bit surprising: Peugeot and Fiat have both made clear in the past that they’re keen on consolidation, and indeed they’ve discussed working together before.Providing the two partners are willing to take tough decisions and politics doesn’t get in the way (again), the stars might just align this time. If anyone can make a go of a hugely complex trans-Atlantic auto merger, Peugeot’s self-assured CEO Carlos Tavares is surely that person.The main reason these two companies are talking is that they’re both sub-scale compared with industry giants Volkswagen AG and Toyota Motor Corp. That matters when the industry is spending heaps on things like electrification and autonomous driving. Neither company is a leader in these technologies, but sharing the financial burden would certainly help. It’s also helpful that their respective stock market valuations aren’t that far apart. This makes an all-share merger of equals conceivable and avoids one party having to shell out for a big premium.Renault long seemed the more logical partner for Fiat because roughly 80% of Peugeot’s sales are in Europe, where Fiat struggles to make money and has tried to diversify away from. However, Renault has drifted since the arrest of former boss Carlos Ghosn, its cash flow has deteriorated and its alliance with Nissan Motor is in need of repair. In short, it’s not a tremendously appealing partner right now.In contrast, Peugeot is in good health. Tavares has shown his mettle by rapidly turning around the Opel/Vauxhall business that Peugeot acquired from General Motors. And even Germany’s luxury carmakers are struggling to match the almost 9% operating profit margins that Peugeot is achieving, despite a pretty tepid European car market.While Fiat’s balance sheet isn’t as strong as Peugeot’s, there’s still plenty there to tempt Tavares. In Jeep and Ram, Fiat has a very profitable SUV and trucks business, and that U.S. footprint would be helpful if Peugeot decides to re-enter the U.S. market. So what could go wrong? Plenty. Fiat and Renault’s merger talks fell apart because the French state, a Renault shareholder, couldn’t get comfortable. And unfortunately for Tavares, France also owns a 12% stake in Peugeot.In theory France should welcome consolidation that strengthens a key domestic manufacturer. But the greatest financial benefits of a merger would come from rationalizing their respective manufacturing footprints — and that means cutting jobs.Still, Fiat Chairman John Elkann, head of the billionaire Agnelli clan, has doubtless learned a few lessons from his earlier entanglements with French politics. Once bitten, twice wiser? One way or the other, we’re about to find out. (Updates with confirmation of the talks.)To contact the author of this story: Chris Bryant at firstname.lastname@example.orgTo contact the editor responsible for this story: Daniel Niemi at email@example.comThis column does not necessarily reflect the opinion of the editorial board or Bloomberg LP and its owners.Chris Bryant is a Bloomberg Opinion columnist covering industrial companies. He previously worked for the Financial Times.For more articles like this, please visit us at bloomberg.com/opinion©2019 Bloomberg L.P.
Information concerning the total number of voting rights and shares, provided pursuant to article L. 233-8 II of the Code de commerce (the French Commercial Code) and the.