Fiat Chrysler Automobiles (FCA) has withdrawn the merger offer with Renault not shortly after reaching a preliminary agreement with France in terms of the proposed offer.
Renault issued a statement that it was considering a potential 50/50 "interest-free" merger, but could not make a decision as representatives of the French state, which owns 15 percent of Renault, demanded that the car's vote be postponed at a later meeting. This request followed two consecutive days of meetings of Renault's board of directors.
In return, the FAC issued a statement saying "it became clear that the political conditions in France do not currently exist for such a combination to continue successfully."
The US carmaker thanked the heads of Renault, along with partners in the Alliance, Nissan and Mitsubishi. The FAA proposed the merger with Renault on May 27. It will be created by the world's third-largest carmaker, behind Volkswagen and Toyota, and was estimated at 35 billion US dollars.
On Wall Street Journal announced that FCA withdrew the merger offer after Nissan refused to support the deal. The newspaper also said that it was Nissan's stance, prompting the French government to seek postponement of the election.
Reuters reported that Nissan's general manager Hiroto Saikawa said the merger of the FCA-Renault "will require a fundamental overview" of his company's relationship with the Renault-Nissan-Mitsubishi Alliance. The connection between Nissan and Renault has already caught up with the arrest of CEO Carlos Gosn.
Prior to the withdrawal of the FCA, the merger proposal is expected to pass without any problems, although worries about job losses have been raised by European governments. The United Auto Workers' Union (UAV) said in a statement: "As with any merger of companies, the UAV is first and foremost concerned how this will affect our members. FCA's management told us that this action will not result in closure to our represented locations. "
After the initial announcement of the proposal, Mike Manley, the executive director of FCA, sold $ 3.5 million worth of shares. In other news, US sales chief Reid Bigland sued a motor mechanic in the whistleblower lawsuit, arguing that the company had punished him to address the federal government about declaring a sale.