FCA Withdraws 50/50 Merger Proposal With Renault Citing Political Reasons

FCA Renault merger

Fiat Chrysler Automobiles has said that the political conditions in France do not currently exist for the merger to proceed successfully

In an official press release, it has been stated that the Board of Fiat Chrysler Automobiles N.V. convened under the Chairmanship of John Elkann, and resolved to withdraw with “immediate effect” its merger proposal made to Groupe Renault. The political conditions prevailing in France have been cited as the reason for the abrupt ending as they do not currently allow for such a merger to exist successfully.

FCA has expressed its gratitude to Groupe Renault, its Chairman and Chief Executive Officer in particular, and also the Alliance partners at Nissan Motor Company and Mitsubishi Motors Corporation, for their engagement on everything regarding this proposal all along.

Renault S.A.’s Board of Directors met under the chairmanship of Jean-Dominique Senard, to review the proposal interest received from FCA (Fiat Chrysler Automobiles) for the potential 50/50 merger. They could not take a decision due to the request produced by the representatives of the French State to postpone the vote to a later Council.

Hyundai Plans Buying FCA

Regardless, FCA has further said that the Italian-American brand will continue to deliver on its commitments through the implementation of the independent strategy. Speculations surrounding the merger emerged on the internet back in March as it focussed on a potential merger between Renault and Nissan with FCA getting into the act eventually.

The 50/50 merger proposal with Renault announced by FCA came into existence only a week ago and thus the time taken for the authoritative board’s review appears to have been shorter than expected. It was also rumoured that the proposal did not include Nissan and Mitsubishi at least initially despite FCA thanking both the brands for engagement in all aspects.

FCA has long been said to be open about mergers and evaluating potential offers as a partnership with Hyundai and some notable Chinese companies has often surfaced online. The brand seems to be currently contending with its own self but do not rule out any merger acts in the not so distant future.