Photo: Stefan Baldauf / Guido Ten Brink
Nearly two weeks after it pompously announced it submitted a merger proposal to French carmaker Renault, Fiat Chrysler Automobiles (FCA) said on Wednesday (June 5) that it is dropping any plans to continue with such the deal, citing opposition from the French political environment.
The announcement comes on the heels of Renault saying that it is unable to make a decision on the matter due “to the request expressed by the representatives of the French State to postpone the vote to a later Council.” The French state has a stake in Renault.
Unwilling to wait until that later council meeting, FCA said it “resolved to withdraw with immediate effect its merger proposal made to Groupe Renault.”
The company claims the proposal was “widely appreciated since it was submitted,” but the decision to drop the pursuit of this goal was made after it “has become clear that the political conditions in France do not currently exist for such a combination to proceed successfully.”
As per the original plan, FCA and Renault were supposed to merge under the umbrella of a new Dutch parent company. Their combined production output would have made the group the third largest car manufacturer in the world, with combined sales of around 8.7 million vehicles annually, and the two would have saved in excess of €5 billion thanks to the resulting synergies.
The Italian-American call for joining forces was not received as enthusiastically as FCA would have hoped. The French said at the time they would answer the “friendly” request in due time, while their Alliance partners, Nissan, expressed concerns that Renault would undergo a severe corporate transformation as a result.
At this point is unclear what were the French government’s objections to the deal and why they asked for more time to decide. Whatever the reasons were, it killed the merger.
Unwilling to wait until that later council meeting, FCA said it “resolved to withdraw with immediate effect its merger proposal made to Groupe Renault.”
The company claims the proposal was “widely appreciated since it was submitted,” but the decision to drop the pursuit of this goal was made after it “has become clear that the political conditions in France do not currently exist for such a combination to proceed successfully.”
As per the original plan, FCA and Renault were supposed to merge under the umbrella of a new Dutch parent company. Their combined production output would have made the group the third largest car manufacturer in the world, with combined sales of around 8.7 million vehicles annually, and the two would have saved in excess of €5 billion thanks to the resulting synergies.
The Italian-American call for joining forces was not received as enthusiastically as FCA would have hoped. The French said at the time they would answer the “friendly” request in due time, while their Alliance partners, Nissan, expressed concerns that Renault would undergo a severe corporate transformation as a result.
At this point is unclear what were the French government’s objections to the deal and why they asked for more time to decide. Whatever the reasons were, it killed the merger.
Google News