Last week, Fiat Chrysler Automobiles announced that it was making an official proposal to merge with Groupe Renault, the French automaker that was already part of an alliance with Renault, Nissan, and Mitsubishi. Just over a week later, FCA issued a very short statement saying that the deal was off.
"The Board of Fiat Chrysler Automobiles N.V., meeting this evening under the Chairmanship of John Elkann, has resolved to withdraw with immediate effect its merger proposal made to Groupe Renault," reads the statement. It's short and sweet, the deal is off.
Why the change? FCA says that it remains convinced that the merger would be compelling and "deliver substantial benefits to all parties," but that political conditions in France won't allow it to proceed.
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What conditions are those? Renault's statement said that it was "unable to take a decision due to the request expressed by the representatives of the French state to postpone the vote to a later meeting," but that it was planning to continue to review the proposal.
Automotive News cites persons familiar with the events as saying that the French government wanted more control over the merged company. The government currently holds 15 percent of Renault. French Finance Minister Bruno Le Maire said in a statement that the group still needed the support of Nissan to complete the deal.
Renault's statement about the cancelled merger says that they appreciate Nissan's "constructive approach" to the deal. Also that they "view the opportunity as timely, having compelling industrial logic and great financial merit, and which would result in a European based global auto powerhouse."