The proposed merger between Fiat Chrysler Automobiles (FCA) and Renault is ambitious, and while the two merger-hungry carmakers definitely have the appetite for such a move, there are some hurdles they need to clear for the $35 billion-plus merger of equals to see the light.

Always, the main aim behind mergers is to create synergies and reduce cost (five billion euros a year is the figure that has been floated). The number of staff and plants will have to be streamlined, but this is tough when your main shareholder is the government, which of course doesn’t want job cuts – an angry populace is against its interests. In this case, the French government has 15% majority stake in Renault.

French finance minister Bruno Le Maire said yesterday that the plan was a good opportunity for both Renault and the European car industry, which has been struggling for years with overcapacity and subdued demand. However, Reuters reported that the minister also wanted four guarantees in exchange for backing a deal that would dilute its 15% Renault stake to 7.5% of the combined entity.

“The first: industrial jobs and industrial sites. I told the Renault chairman very clearly that it was the first of the guarantees I wanted from him in the opening of these negotiations. A guarantee on the preservation of industrial jobs and sites in France,” Le Maire said.

He added that France wants to be well represented on the board of the new company, for it to be a leader in developing electric batteries and for the deal to take place “within the framework of the alliance between Renault and Nissan.” Yes, France wants Renault’s long-time alliance partner in the picture as well.

A source who’s in the know told the newswire that FCA and Renault have given commitments about maintaining industrial jobs and sites, leaving room for white-collar and engineering layoffs as well as some plant downsizing.

Separately, Italy wants to be in the frame as well – this week, deputy prime minister Matteo Salvini said Rome might need to take a stake in the combined company to balance France’s shareholding. There’s also the small matter of trade unions.

European jobs aside, the other main obstacle lies in the Far East. Renault chairman Jean-Dominique Senard has gone to Japan to discuss the issue with Nissan, which apparently only found out about Renault’s merger talks with FCA days before it hit the news. The bigger but weaker (in terms of voice) alliance partner is said to fear that a deal could further weaken its position in the 20-year marriage with Renault.

This also comes at at time when Nissan has been resisting Renault’s plans to forge closer links via the creation of a holding-company structure. This has been cited as the reason behind alliance supremo Carlos Ghosn’s ouster and multiple financial misconduct charges in Japan.

France’s Le Maire said he had spoken to the Japanese about the proposed merger. To questions of how Nissan responded, he said: “I look at the reaction of Nissan president Mr Saikawa, and it’s a reaction that is open.” Nissan CEO Hiroto Saikawa told Japanese TV on yesterday that Nissan is “open to constructive discussions”.

A source told Reuters that Saikawa is likely to have first caught wind of the merger plan through his chief operating officer, Yasuhiro Yamauchi, who also sits on Renault’s board. Analysts speculate that Nissan, which has a 15% stake in Renault with no voting rights, might be reluctant to back a FCA-Renault merger that would probably use less of its technology than at present.

There’s also the argument that this “merger of equals” undervalues Renault. According to former Renault COO Patrick Pelata, by valuing Renault at its market price, the all-share offer attributes a negative six billion euro value to Renault operations after deduction of its 43.4% stake in Nissan and 3.1% Daimler shares.

“That’s hardly reasonable. And I think that shareholders, including the French state, are bound to take issue with this sooner or later,” he told French radio, while arguing that FCA needs this more. “FCA has big problem because they haven’t invested for the future – they have no electric vehicle platform and they’ve done nothing in autonomous cars.”

Should it happen, a joint FCA-Renault would be only behind Toyota and the Volkswagen Group in terms of global car sales. Include Nissan, which owns Mitsubishi, and combined sales will be by far the largest in the industry. On FCA’s side, besides the two namesake brands, its other marques include Abarth, Alfa Romeo, Dodge, Jeep, Lancia, Maserati and Ram Trucks. Ferrari was spun-off the group in 2015.