Renault's chairman on Wednesday expressed his frustration with the French government for resisting a merger deal proposed by rival carmaker Fiat Chrysler, and at a critical time — ahead of what he views as a coming "tsunami" from China's auto industry.
Jean-Dominique Senard told a shareholders' meeting in Paris that "I have rarely seen a merger proposal that could give so much positive synergy, incredibly validating and robust."
He said that at a board meeting convened to discuss the plan, everyone had approved the plan "with enthusiasm" except one. Board members from Renault's alliance member, Nissan, abstained but in a "very positive way."
A hostess holds a sign of French automaker Renault Group to show the way for the Renault shareholders general meeting in Paris, France, Wednesday, June 12, 2019. (AP PhotoFrancois Mori)
Senard said the French government, which is Renault's biggest shareholder with a 15% stake, had not shared his analysis of the benefits of the merger "at this stage."
"I can frankly say that disappoints me," he said.
Senard opened to the possibility of reopening talks, saying that the merger proposal "remains in my head potentially remarkable and exceptional."
A sign of French automaker Renault Group shows the way for the Renault shareholders general meeting in Paris, France, Wednesday, June 12, 2019. (AP PhotoFrancois Mori)
Fiat Chrysler had proposed a 50-50 merger that would have created the world's third-largest carmaker worth almost $40 billion. But the role of Nissan, Renault's longtime alliance partner, was unclear and the French government wanted more time to sort out the details. Fiat Chrysler pulled the proposal, citing political conditions in France.
Renault's alliance with Nissan has become strained since the arrest last November in Tokyo of former chairman and CEO Carlos Ghosn, who is no longer in the company. Ghosn has been charged with falsifying financial reports in under-reporting compensation and breach of trust in having Nissan Motor Co. shoulder investment losses and paying a Saudi businessman.
The upheaval led to a restructuring of Renault with Senard brought in and Thierry Bollore becoming the new chief executive.
While the Ghosn saga dominated headlines for months, it was the merger failure that was on the minds of many shareholders on Wednesday.
"I was surprised to see FCA (Fiat-Chrysler Automobiles) pose an ultimatum, saying it's 'Take it or leave it and we won't let you take the time to think about it,'" said Herve Charron, a retiree heading into the meeting. "It's a bit scandalous. When the stakes are at 30 billion euros, you have to think and take your time."
Another shareholder was more philosophical.
"I was quite surprised (after negotiations with Fiat-Chrysler fell through) but that's business. Half of all mergers go awry. This one didn't even happen!" said Daniel De Rincquesen.
Answering questions from shareholders on the merger failure, Senard said the wider industry context was critical, notably looming rivalry from the fast-growing Chinese auto industry.
"We face a period in which the blossoming of the Chinese industry will probably translate into a form of tsunami" in our region, Senard said. Anticipation and strength are essential, he added.
Senard said he quickly realized that a merger with Fiat Chrysler had something for both Renault and the alliance between Renault, Nissan and Mitsubishi.
Alex Turnbull in Paris contributed.
FRANKFURT, Germany (AP) — Finnish authorities detained a ship linked to neighboring Russia as they investigate whether it damaged a Baltic Sea power cable and several data cables, police said, in the latest incident involving disruption of key infrastructure in the region.
Finnish police and border guards boarded the vessel, the Eagle S, early Thursday and took over the command bridge, Helsinki Police Chief Jari Liukku told a news conference. The vessel was being held in Finnish territorial waters, police said.
The Eagle S is flagged in the Cook Islands, but was described by Finnish customs officials and the European Union's executive commission as part of Russia's shadow fleet of fuel tankers. Those are aging vessels with obscure ownership, acquired to evade Western sanctions amid the war in Ukraine and operating without Western-regulated insurance. Russia's use of the vessels has raised environmental concerns about accidents given their age and uncertain insurance coverage.
The Eagle S's anchor is suspected of causing damage to the cable, Yle television reported, relying on police statements.
The EU's foreign policy chief, Kaja Kallas, said in a statement that the incident was “the latest in a series of suspected attacks on critical infrastructure” and commended the Finnish authorities “for their swift action in boarding the suspected vessel."
The ship “is part of Russia’s shadow fleet, which threatens security and the environment, while funding Russia’s war budget,” said Kallas, a former Estonian prime minister. "We will propose further measures, including sanctions, to target this fleet.”
The Estlink-2 power cable, which brings electricity from Finland to Estonia across the Baltic Sea, went down on Wednesday. The incident follows damage to two data cables and the Nord Stream gas pipelines, both of which have been termed sabotage.
The Estonian government met in emergency session over the incident. The shadow tankers “are helping Russia to earn funds that will aid Russian hybrid attacks,” Prime Minister Kristen Michal said at a news conference. “We need to improve the monitoring and protection of critical infrastructure both on land and on sea.”
He said repairs to the cable could take as long as seven months.
“Repeated damage to Baltic Sea infrastructure signals a systemic threat, not mere accidents,” Estonia's President Alar Karis said on X. “Estonia will take action to counter this threat, together with Finland and other NATO allies.”
Two data cables — one running between Finland and Germany and the other between Lithuania and Sweden — were severed in November. Germany’s defense minister said officials had to assume the incident was “sabotage,” but he didn't provide evidence or say who might have been responsible. The remark came during a speech in which he discussed hybrid warfare threats from Russia.
The Nord Stream pipelines that once brought natural gas from Russia to Germany were damaged by underwater explosions in September 2022. Authorities have said the cause was sabotage and launched criminal investigations.
Estonian network operator Elering says there is enough spare capacity to meet power needs on the Estonian side, public broadcaster ERR said on its website.
This photo provided by Rajavartiosto (Finnish Border Guard) on Thursday, Dec. 26, 2024, shows the oil tanker Eagle S at sea outside Porkkalanniemi, Finland. The Eagle S was sailing at the same time in the area where the Finland-Estonia electrical link was disrupted on Wednesday. (Rajavartiosto via AP)
This photo provided by Rajavartiosto (Finnish Border Guard) on Thursday, Dec. 26, 2024, shows the oil tanker Eagle S, background, and the Finnish Border Guard ship Turva at sea outside Porkkalanniemi, Finland. The Eagle S was sailing at the same time in the area where the Finland-Estonia electrical link was disrupted on Wednesday. (Rajavartiosto via AP)
FILE - Finland's Prime Minister Petteri Orpo arrives for an EU summit at the European Council building in Brussels, Thursday, Dec. 19, 2024. (AP Photo/Geert Vanden Wijngaert, File)
Finnish Prime Minister Petteri Orpo attends a press conference in Helsinki, Finland, Thursday, Dec. 26, 2024, as police investigating the electricity transmission between Finland and Estonia through the Estlink 2 connection which was cut on Christmas Day, according to Finnish grid operator Fingrid. (Jussi Nukari/Lehtikuva via AP)
Finnish National Police Comissioner Ilkka Koskim'ki attends a press conference in Helsinki, Finland, Thursday, Dec. 26, 2024, investigating the electricity transmission between Finland and Estonia through the Estlink 2 connection which was cut on Christmas Day, according to Finnish grid operator Fingrid. (Jussi Nukari/Lehtikuva via AP)
