PARIS -- Fiat Chrysler has resolved key differences with France over its proposed merger with Renault, three sources told Reuters on Tuesday, as the French automaker's board met to review the $35 billion tie-up plan.
The compromise on French government influence over a combined FCA-Renault may clear the way for Renault directors to approve a framework agreement and begin the long process of a full merger, unless new issues surface at their meeting.
France, Renault's biggest shareholder with a 15 percent stake, had been pressing for its own guaranteed seat on the new board and an effective veto on future CEO appointments.
But after late-night talks with FCA Chairman John Elkann, officials approved a compromise giving the French government one of four board seats allocated to Renault, balanced by four FCA appointees, the sources said.
Renault would also cede one of its two seats on a four-member CEO appointment committee to the French state, they said.
With Renault chairman Jean-Dominique Senard, 66, set to become FCA-Renault's first operational chief under Elkann's chairmanship, the move gives France a formal say on the appointment of his successor.
Renault, FCA and the French government, which have been locked in talks over the offer pitched by FCA to create the world's third-biggest carmaker, declined comment.
The proposal would see both automakers acquired by a listed Dutch holding company owned 50-50 by current FCA and Renault shareholders, after payment of a 2.5 billion euro ($2.8 billion) special dividend to FCA shareholders.
Responding to criticism from some analysts and French industry leaders that the deal undervalued Renault and its 43.4 percent stake in Nissan, Paris pushed for better terms.
This bore fruit over the weekend, as FCA discussed concessions including a dividend to Renault shareholders, stronger French job guarantees and a Paris-based regional headquarters for the combined group.