Fiat Chrysler withdraws Renault merger offer

Jun 6, 2019   OEM

Fiat Chrysler has pulled their support for a deal that would have created the world's largest carmaker.

Citing political obstacles - Renault is partly owned by the French government and the obvious reluctance of Nissan to agree to a merger, FCA said that while it 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, it has become clear that the political conditions in France do not currently exist for such a combination to proceed successfully."

After a lot of negotiation, a vote was taken, in which Nissan representatives abstained, the leftist CGT union voted against, and all other directors voted for it. When it was the French state representatives' turn to vote, they insisted that the vote be postponed, underlining the government's reluctance to endorse any move that would see its share diminish.

On June 3, the CEO of Nissan, Hiroto Saikawa said that the proposed merger, if it happened, would significantly alter the structure of Renault. "This would require a fundamental review of the existing relationship between Nissan and Renault," he said.

Industry observers generally see this as the beginning of further negotiations but some experts have said that there are insurmountable obstacles to the merger.

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