The expected merger of Fiat Chrysler Automobiles (FCA) and Renault has become one of the most important news in the auto industry in recent years: such a large merger has not happened for a long time. Later, information appeared about the discussion of an agreement within the Renault-Nissan-Mitsubishi alliance, but now the FCA has withdrawn its proposal. The unexpected change in course is reported by The Wall Street Journal, citing its own sources.
According to the publication, the FCA did not pull out of the deal on its own initiative. The American-Italian corporation withdrew its offer because of the position of Nissan and the French authorities: the Japanese company is wary of a new partnership with Renault, and amid this uncertainty, France has requested more time for joint negotiations.
Noticing such a delay, the FCA decided to withdraw from the deal. At the same time, the automaker is still saying that it is confident in the success of a possible merger with Renault. “However, it has become clear that the political conditions in France are not currently suited to this successful association,” the FCA said in a statement.
Renault itself has so far escaped with routine phrases: "The Board of Directors could not make a decision because of the desire of the representatives of the French state to postpone the vote until the next meeting of the board."
The French government, which is a major shareholder of Renault, said on Wednesday that it would not approve an FCA merger proposal without a guarantee from Nissan to maintain the alliance with Renault. At the same time, two representatives of Nissan, who are part of the board of Renault, abstained from voting on the merger proposal. This fact alerted the French government, which asked to postpone the final decision.
On Monday, Nissan CEO Hiroto Saikawa, who took over in 2017, said the deal with FCA would significantly change Renault's structure. “This will lead to a fundamental review of the existing relationship between Nissan and Renault,” added Saikawa.
The further fate of the deal remains in question. Despite the FCA's withdrawal of its proposal, neither the concern itself nor Renault have so far made statements that there will definitely not be a merger now. At the same time, the moment for the deal could be lost: the fears of Nissan and the French government are only intensifying, besides, now Renault chairman Jean-Dominique Senard and FCA head John Elkann, who spoke about the merger yesterday, are now at a disadvantage, as about an almost accomplished fact.
FCA withdraws offer to merge with Renault
