Fiat Chrysler has withdrawn its offer of a 50-50 merger with rival carmaker Renault. The companies now risk losing out on synergies worth 5 billion euros a year, while the French state has sabotaged its pro-business credibility: LiamWardProud
Fiat Chrysler Automobiles on June 6 withdrew its offer of a 50-50 merger with rival carmaker Renault. The withdrawal came after Renault’s board failed to reach a conclusion on Fiat’s proposal despite meeting on two consecutive days.
Fiat remains “firmly convinced of the compelling, transformational rationale of a proposal”, but said it was clear that the “political conditions in France do not currently exist for such a combination to proceed successfully”. Reuters reported that France’s government, a 15% shareholder, sought to delay a Renault board decision on the deal to consult further with the company’s alliance partner Nissan Motor. The Wall Street Journal reported that the Japanese group in which Renault owns a 43% stake refused to back the deal.
Renault said its board of directors was “unable to take a decision due to the request expressed by the representatives of the French state to postpone the vote”. Fiat on May 27 proposed a 50-50 merger with Renault to create the world’s third-largest carmaker with combined sales of 8.7 million vehicles.
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