The Fiat Chrysler group withdrew its bid to merge with French company Renault after the French government demanded a delay in deciding whether to have a deal, the agencies in the world quoted BTA.
Renault's board did not take a decision at a late evening meeting. This happened after representatives of the French government demanded that the vote be postponed at the next meeting.
The French state has 15 percent stake in Renault, making it the largest shareholder in the company.
A $ 35 billion bid from an Italian-US joint venture could create the third-largest maker in the world after German Volkswagen and Japanese Toyota.
The proposal was generally welcomed in France, provided that the future of jobs and factories in the country is guaranteed. However, analysts have warned of complications from a possible merger, including a rival between Renault and Japan's Nissan, the role of the French state as the largest shareholder and the potential resistance of politicians and workers from any cuts, Reuters notes.