Fiat Chrysler withdraws merger offer to Renault after Nissan balks

2017 Fiat 500e

2017 Fiat 500e

A potential merger between Fiat Chrysler and Renault, which would have involved Japanese partners Nissan and Mitsubishi, is off the table.

Fiat Chrysler withdrew the offer after Nissan, Renault’s larger but junior partner withheld its support. A report in trade journal Automotive News (subscription required), noted that Nissan representatives abstained from the final vote Wednesday night. Nissan owns 15 percent of Renault, while Renault owns 43.4 percent of Nissan.

The final agreement also foundered after the French government, which also owns 15 percent of Renault, requested a delay in the vote after a key union voted against the deal.

“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. The company said it 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.”

2018 Jeep Grand Commander

2018 Jeep Grand Commander

Shortly before the deal fell apart a Fiat Chrysler representative told Reuters “Nissan needs to be in the loop.” 

But Nissan CEO Hiroto Saikawa said Monday the merger “would require a fundamental review of the existing relationship between Nissan and Renault.”

The tie-up would have resulted in the world’s largest automaker, with 8.1 million sales a year of everything from tiny European city cars to hulking American pickup trucks.

One thing Nissan could have brought to the table is the electric-car technology behind the Leaf, which remains the cumulative top-selling electric car in the world and recently passed 400,000 sales.

Fiat Chrysler withdrew the offer after the French government asked for more time.

With all automakers facing pressure to develop cleaner electric cars, as well as self-driving cars and transportation services, smaller companies like Fiat Chrysler and Renault are likely to continue to seek other partners.

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