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Fiat Chrysler Withdraws Merger Proposal With Renault

Fiat-Chrysler’s proposed merger with Renault fell apart on Wednesday just a week after Fiat-Chrysler sent the proposal.

Renault’s response was one of open-mindedness, but Fiat-Chrysler Automobiles (FCA) clearly stated where they believe the responsibility lies.

There was plenty of hope and optimism surrounding this merger, which would have been massive. While both parties to the potential merger provided only brief explanations, FCA was clear in their belief that the deal was ruined by French politics. In the end, this was an incredibly fast turnaround, as far as discussions of mergers of this magnitude go. FCA and Renault were quite close to a 50-50 merger, which would have created a new giant worth $35 billion, making them the third largest auto manufacturer in the world.

Unfortunately, the proposal fell through shortly after being announced. “Groupe Renault expresses its disappointment not to have the opportunity to continue to pursue the proposal of FCA,” the Renault board of directors said in a statement. While Renault may have wanted the deal to work out, the French government owns 15% of Renault, and has concerns of its own. The current alliance between Renault and Nissan has seen some serious challenges stemming from the current debacle surrounding Carlos Ghosn. There are also concerns held by the French government regarding Nissan’s power, and vice-versa. The French government would be unlikely to support a deal which would result in job losses in France, as the deal inevitably would. The French government, for their part, has rejected any blame for the deal not coming to fruition, and has stated that they hope the deal can be saved.

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