Fiat Chrysler no longer want to marry Renault-Nissan-Mitsubishi

Daniel Fowler
June 7, 2019

The French government, which has a 15% stake in Renault, had welcomed the merger plan, but overplayed its hand by pushing for a series of guarantees and concessions that eventually exhausted the patience of FCA, sources familiar with the talks said.

Then the great plan came crashing down, with Bloomberg News reporting in the small hours of Thursday that Fiat had withdrawn its offer.

"However, it has become clear that the political conditions in France do not now exist for such a combination to proceed successfully", the firm added.

For now, it appears the merger has been scuttled, with FCA thanking Renault and its alliance partners Nissan and Mitsubishi for their work on the proposal.

Renault owns 43 percent of Nissan, and Saikawa said the merger would have "significantly" changed the structure of its existing alliance.

Fiat Chrysler made the offer for Renault at the end of last month, describing it as a "transformative" proposal that would create a global automotive leader.

The company says it will deliver on its commitments with a strategy to remain independent.

Achieving the planned 5 billion euros in FCA-Renault synergies would depend partly on access to technology jointly owned by Nissan, executives had said.

While FCA isn't the only automaker under investigation for alleged false reporting of sales, it is FCA that first piqued the government's interest after two IL dealers filed civil racketeering suits over FCA's request that they report unsold vehicles as sold in exchange for $20,000 in incentives.

Day commemorated in United Kingdom port city
But even as Britain now tries sever its ties with the bloc, Macron said some ties between France and Britain were indestructible. The invisible frontier between the United Kingdom and the Irish Republic is one of the most contentious Brexit issues.

Fiat Chrysler had proposed that its shareholders receive a €2.5 billion ($2.8 billion) special dividend as part of the merger, had it been completed.

A merger would create the world's No. 3 auto company after Volkswagen and Toyota, and could reshape the industry as carmakers race to make electric and autonomous vehicles. That's more than General Motors makes, and trails only Volkswagen and Toyota.

Earlier Wednesday, France's finance minister said the vehicle companies shouldn't rush into a merger.

Fiat Chrysler Chairman John Elkann, a member of Italy's elite Agnelli family and a direct descendant of Gianni Agnelli, sought to defend the original terms proposed and went on to "iron out most differences with representatives of the French government, led by finance minister Bruno Le Maire", according to AN.

"The state will play its role fully as a Renault shareholder".

Fiat Chrysler Automobiles (FCA) has announced it's withdrawing its proposal to merge with Groupe Renault, in a press release issued this morning. But France's representatives asked for more time after officials made clear they wanted to discuss the deal further with Japanese officials before making a decision, they said. "We want this merger, but we don't want it under just any conditions".

Adding in complex negotiations with FCA - which would be focused on working with Renault, not Nissan - in the next year could have risked the collapse of the alliance.

Industry shifts toward electric models, along with stricter emissions standards and the development of new technologies for autonomous vehicles, have put increasing pressure on carmakers to consolidate.

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