Fiat Chrysler isn’t one to wait around. The automaker withdrew its $35 billion proposal to merge with Groupe Renault this week, shortly after Renault postponed a vote on a decision to progress it. The deal would have created the world’s third largest automaker.
Renault delayed its decision mid-week, it said at the request of the French government, which owns 15% stake in the company. FCA countered the postponement by withdrawing its offer all together, completely citing “political conditions” in France.
In a statement, it said: "It has become clear that the political conditions in France do not currently exist for such a combination to proceed successfully."
You can read the entire FCA press release here
While the French government is said
to have welcomed the plan, according to Reuters, France exhausted the patience of FCA by pushing for guarantees and concessions. A French official reportedly tried to save the potential deal by calling FCA Chairman John Elkann Thursday to ask FCA to reconsider, to no avail.
There were certainly several issues at play. For one, Nissan, which is also on the Renault board, said it would abstain from voting. It also said a merger would cause it to re-examine its relationship with Renault. Nissan is 43% owned by Renault. There were also concerns about what a merger would do Renault’s workforce and if could ultimately mean layoffs.
Renault’s response to FCA’s abrupt withdrawal
said in part, “Groupe Renault expresses its disappointment not to have the opportunity to continue to pursue the proposal of FCA. We appreciate Nissan’s constructive approach and wish to thank FCA for their efforts and the Renault’s Board of Directors for its continued confidence.”
FCA made its proposal just 11 days ago, seeking to gain access to Renault’s electric drive technology, while giving Renault a share in its RAM and Jeep brands.