Fiat Chrysler Withdraws Merger Proposal With Renault


Fiat Chrysler has withdrawn its proposal to merge with French automaker Renault - a deal that would have reshaped the global auto industry and helped the carmakers compete in the race for electric and self-driving vehicles.

A French government official was more direct, saying that Fiat Chrysler was at fault for the merger collapse, placing "massive pressure", to quickly take the offer or leave it.

Fiat Chrysler (FCA) "remains firmly convinced" of the interest of its offer but "political conditions do not now exist in France to carry out such an arrangement", it said in a statement.

"FCA remains firmly convinced of the compelling, transformational".

But Le Maire stressed that of his conditions for the FCA alliance, only the explicit approval of Nissan remained to be secured, while aides denied that the ministry had played politics with the deal.

The French government, which owns a 15 percent stake in Renault, had also pushed Fiat Chrysler and Renault for guarantees that France would not lose jobs, and for a dividend to be paid to Renault shareholders, including the government, people familiar with the talks said. In addition to the demands from the French state, unions were anxious about jobs and Japanese partner Nissan felt burned by the previous regime under deposed alliance Chairman Carlos Ghosn.

It would have created the world's third-largest automaker, behind Volkswagen and Toyota, and was valued at US$35 billion.

Achieving the planned 5 billion euros in FCA-Renault synergies would depend partly on access to technology jointly owned by Nissan, executives had said.

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According to AN, the French Government and Renault pushed Nissan to sponsor the merger during the meeting and even went as far as stopping negotiations three times to consult privately. Nissan has two members appointed to Renault's board of directors.

"The demands of Nissan and the French grandeur have caused the French and Nissan to miss a great industrial and economic opportunity", Claudio Chiarle of the FIM-CISL union told the ANSA news agency.

FCA abruptly yanked its offer after the government said it wanted to wait until Tuesday to make a decision so it could meet in Japan with Nissan representatives, the person said.

The French government said it had placed four conditions on the deal, and getting support from Nissan was the condition that wasn't met. Finance minister Bruno Le Maire is planning a trip to Japan next week.

The plan was welcomed by analysts as one of the few deals in the auto sector that might prove a success, given the companies' complementary range of vehicles and regional markets. "Given the longstanding relationship between Renault and Nissan, it's hard to imagine the merger working without Nissan's full support".

It could also have restricted access to some of the key technologies jointly developed over its 20-year marriage with Renault, such as the new CMF platform and driver-assistance systems such as ProPilot.