The folks at the Board of Fiat Chrysler Automobiles under the Chairmanship of John Elkann, has decided to withdraw merger proposal made to Groupe Renault citing political conditions in France.
“FCA remains firmly convinced of the compelling, transformational rationale of a proposal that has been widely appreciated since it was submitted, the structure and terms of which were carefully balanced to deliver substantial benefits to all parties. However, it has become clear that the political conditions in France do not currently exist for such a combination to proceed successfully,” the company said in a statement.
The $35 billion merger offer according to reports, would have resulted in the creation of the world’s third largest carmaker. The reports also claim that the French government, which owns 15% stake in Renault, had also pushed FCA for guarantees which included safeguarding French jobs, and for a dividend to be paid to Renault shareholders, including the government.
The Board of Directors at Renault in a separate statement said that they were unable to take a decision (for a potential 50/50 merger between Renault and FCA) due to the request expressed by the representatives of the French State to postpone the vote to a later Council. “Renault expresses its disappointment not to have the opportunity to continue to pursue the proposal of FCA,” the company said in another statement.
Both FCA and Renault thanked Renault’s Alliance partners Nissan and Mitsubishi, for their engagement on all aspects of FCA’s proposal.
Source: FCA, Renault, ETAuto, Reuters
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