Fiat Chrysler is withdrawing its 31.2 billion euro merger offer for Renault, abandoning a deal that would have created the world's third biggest carmaker
Italian-American car giant Fiat Chrysler is withdrawing its 31.2 billion euro merger offer for French car-maker Renault, blaming French politics for scuttling what would have been a landmark deal to create the world's third-biggest automaker.
A source close to the French car-maker's board said Fiat Chrysler made the move after France sought to delay a decision on the deal in order to win the support of Nissan Motor Co, Renault's Japanese alliance partner.
French government officials had pushed for Nissan to support the merger. Nissan had said it would abstain.
The French government, which owns a 15% stake in Renault, had also pushed Fiat Chrysler and Renault for guarantees that France would not lose jobs, and for a dividend to be paid to Renault shareholders, including the government, people familiar with the talks said.
"It has become clear that the political conditions in France do not currently exist for such a combination to proceed successfully," Fiat Chrysler said in a statement.
Renault, in a separate statement, said its board was "unable to take a decision due to the request expressed by the representatives of the French state to postpone the vote to a later meeting."
The apparent collapse of merger talks leaves the two companies facing an array of issues, starting with the likely dismay of investors who bid up shares in both companies after Fiat Chrysler proposed a merger of equals just over a week ago.
Fiat Chrysler had proposed that its shareholders receive a 2.5 billion euro special dividend as part of the merger, had it been completed.