Italian-American carmaker Fiat Chrysler on Thursday said it had withdrawn a proposal for a merger with Renault, saying it would be unable to reach an agreement with the French government.
Fiat Chrysler (FCA) “remains firmly convinced” of the interest of its offer but “political conditions do not currently exist in France to carry out such an arrangement”, it said in a statement.
French automaker Renault announced earlier that its board of directors had not made a decision following a crunch meeting held at the request of the French state, the biggest shareholder in Renault with a 15 per cent stake.
The government has warned against “any haste” regarding the proposed 50/50 merger.
French Finance Minister Bruno Le Maire said he wanted a board meeting next Tuesday after a trip to Japan scheduled for the weekend, a source close to Renault said.
At Wednesday evening”s board of directors vote at Renault”s headquarters near Paris, all the directors were for the merger, apart from a representative of employees affiliated with the powerful CGT union and two representatives of Nissan — a long-time Renault partner — who abstained, the source added.
The two directors appointed by Nissan, however, asked “to write in the minutes that they would say yes with a little more time”.
Fiat Chrysler said: “FCA 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.
“However it has become clear that the political conditions in France do not currently exist for such a combination to proceed successfully.”