Fiat Chrysler Automobiles has compromised with the French state regarding its demands for a propose merger with French automaker Renault. The compromises should allow the deal to move forward, pending no other roadblocks are issued.
The French government had been pressing Renault and FCA to guarantee it a seat on the board of directors of the new entity. They were also requesting effective veto power with regards to CEO selection.
Sources tell Reuters FCA Chair John Elkann has been speaking with the French government regarding the impasse and has reached a compromise. The compromise has the French government taking one of Renault’s proposed four board seats, balanced out by FCA’s four board seats.
Renault will also cede one of its two seats on the CEO appointment committee to the French government. The committee will have four seats in total.
Renault’s board of directors is expected to review the proposed $35 billion merger with FCA this week. Assuming the Renault board has no major issues with the revised proposal, the two parties are expected to enter into a memorandum of understanding to formally enter merger talks.