June 6, 2019
In the delicate dance of deals, there’s always the chance they can fall through. That appears to be the case of Fiat Chrysler Automobiles’ proposed merger with French automaker Renault. FCA announced it has decided to “withdraw with immediate effect its merger proposal made to Groupe Renault”. FCA says “it has become clear that the political conditions in France do not currently exist for such a combination to proceed successfully”.
Just last week, Fiat Chrysler Automobiles proposed a 50/50 merger with Groupe Renault. The deal would have created cost savings by sharing global vehicle platforms, powertrains and technology. Combining the two companies would have created the 3rd largest global OEM.
Groupe Renault seemed receptive to the deal. On Tuesday the company’s Board of Directors decided to “continue to study with interest”. Then yesterday they could not make a decision because of what Groupe Renault says was a “request expressed by the representatives of the French State to postpone the vote to a later Council”. Bloomberg cites a French government official as saying they need more time to explain the deal to Nissan. Nissan is part of the Alliance that includes Renault and Mitsubishi.
However, this may not be the end of the merger talks. Bloomberg reports French Budget Minister Gerald Darmanin saying “the government would be open to a new approach from Fiat for Renault in the future”.