FCA Abruptly Withdraws Massive Merger Proposal With Renault

Fiat Chrysler Automobiles has abruptly and unexpectedly withdrawn its offer to merge with Renault following days of discussions between the automakers and the French government.

A press release statement issued late on Wednesday evening stated “that the political conditions in France do not currently exist for such a combination to proceed successfully.” The Wall Street Journal claims that’s not the only reason why the proposal has been withdrawn.

According to unnamed sources close to the matter, negotiations soured as Nissan refused to back the merger. Two representatives from Nissan on the Renault board offered abstentions while voting on the merger and it’s believed that both FCA and Renault were concerned the Japanese car manufacturer would back out of its long-standing alliance with Renault.

Also Read: FCA Discussing Revised Renault Merger Plan To Win Over French Government

The New York Times reports that Renault chairman Jean-Dominique Senard had been seeking to convince the company’s board of the financial and industrial merits of a deal during two days of intense meetings at Renault’s headquarters this week. Earlier on Wednesday, Renault said it had been unable to make a decision because French government representatives requested to postpone a new vote.

Evidently, FCA did not want to wait around and confirmed that the proposal made official on May 26 was no longer on the table.

“The Board of Fiat Chrysler Automobiles N.V, meeting this evening under the Chairmanship of John Elkann, has resolved to withdraw with immediate effect its merger proposal made to Groupe Renault…FCA will continue to deliver on its commitments through the implementation of its independent strategy,” the company said.

Pictured: John Elkann

  • Mr. EP9

    Really? Oh wow, that’s definitely an interesting development.

  • Six Thousand Times

    Seemed like an unwieldy group.

  • kachuks

    Renault/Nissan are a domestic dispute situation that needs couple’s therapy. In the meantime no one should get close to either one.

  • Charles Chin

    They should dump Nissan.

  • MarkoS

    Nissan would be the only one of real value anyway. Next.

  • helloWorld

    I wonder if groupe PSA gave FCA a better deal

  • ThatGuy

    The plot like a gravy thickens

  • Giannis Antypas

    Sometime in the not so distant future,
    FCA and Groupe Renault might reopen their negotiation talks.
    All alone and no Nissan to intervene.

    • charlotteharry57

      The BETTER solution is for Nissan to successfully disembark from the Renault alliance, THEN merge with FCA (and including Mitsubishi in the deal). THAT would yield benefits to all 3. Hoping that FCA secretly floated this idea to Nissan in the past week.

      • RobPul

        Fully agree, geographically they’d complement each other even better than an FCA-Renault deal and most of the EV technologies FCA are interested in come from Nissan

      • PEG

        Exactly what would Nissan gain there ? I mean, the only appeal of FCA (Ram and Jeep) are compete directly with Nissan products, FCA doesn’t open any market that Renault didn’t, doesn’t have any tech… I understand how FCA would like to get Nissan, but the opposite ? Chrysler harmed every group that tried to merge with it, why on Earth should Nissan want them on board ?

        Not to mention that splitting from Renault is going to be delicate, they own 43% of Nissan…

  • Oscar Cereijo

    Wonder if Mr Manley should have sold more of his company shares before the announcement… just saying…

  • charlotteharry57

    I’m thrilled on the one hand because this also knocks out any potential merger between PSA and FCA (maybe Renault and PSA should merge). BUT, it highlights two other “nasties”. First, except for Jeep and RAM pickups, FCA is skin and bones, with little going for it, and no other potential partners are obvious. Second, Nissan isn’t happy with Renault and wants out. But, can it get out?

    • Oscar Cereijo

      Indeed both PSA and Groupe Renault are French, but only the second has government shares (I think 11%). Makes sense, as major shareholder, the government has a saying in this matter.

      • RobPul

        Actually French state owns almost 14% of PSA, which would make a PSA-Renault very doable but then Nissan-Mitsubishi would probably do everything to get out of it

  • Craig

    That took me by surprise. That said [and as I posted earlier] FCA shouldn’t be approaching Renault with their hat in hand. [Which is how it came across to me] Mostly glad the deal is off the table.

  • jcdbs

    FCA wanted to merge with Renault to access Nissan’s technology … obvious

  • Toronado_II

    The begin of their agony ?

  • Super Rob

    Pretty late in the process to just walk away. By this time in negotiations you would assume the French entities already were on board.

  • Bash

    I don’t think anyone saw that coming.

    • donald seymour

      That’s what she said.

  • Ed Ward

    FCA don’t need to merge with any other company, they need to stop wasting money on their Italian egos with alfa romeo and Maserati, Chrysler and Dodge are the brands with the most potential. The Italians are embarrassed by the Maserati/alfa romeo/fiat rejection and the fact that Chrysler is the center of gravity in the (F)CA merger. They need to eliminate the “F” name in the CA equation, rename the company ChryslerAutomobiles and work with Tesla.

    • RobPul

      Actually they’re not investing nearly enough in Alfa and Maserati, that’s the problem, there’s a lot of profit in premium cars market but can’t get there without premium cars. And as for Fiat brand, it was Fiat’s decision to channel resources from low growth segments, where Fiat and Chrysler operate, to high growth ones of SUVs and pickups, where Jeep and Ram operate, almost tripling their sales. Fiat brand still sells well in Latin America and sells 1m a year cars in Europe, could grow again if they decided to reinvest in it, as they’ll probably end up doing if they don’t make a deal with another European mass market car manufacturer.

  • Emoto

    Injecting the French into the management structure is a recipe for disaster anyway. American/Italian/French/Japanese? What a trainwreck of culture clash that would be. Glad it fell apart.

    I would like to see them try to make Chrysler the fine brand it could be. MCGA? 😉

    • PEG

      Chrysler “could be” a fine brand, but actually is not. Chrysler as a group has appeal from Jeep and a bit from Ram, and that’s about it. Fiat also has its dead branches, not only Lancia but also Maseratti… I understand why FCA wanted the deal, they’re going nowhere, but the appeal for Renault is still to be defined.

      Access to the US market ? Who cares, if it’s to lose money by pushing incentives ? Renault doesn’t have the portfolio of models US customers want. Just look at Fiat’s outcome, a boom for a few months, then it’s over…

      Chrysler’s future is to die as a brand, Dodge will end up selling rebranded cheapboxes, Ram and Jeep will continue to sell as long as gas is cheap, meaning FCA will continue to pay heavy money to Tesla to buy CO2 quotas. Fiat has about the same international exposure as Renault, Alfa’s future depends on the quantity of cash its owner has to make it something while Lancia is cold dead…

      I think Renault will end up better without FCA, its main difficulty will be to rebuild the bound with Nissan but it’s not definitely dead, as there are benefits for both.

  • PEG

    The US market is only important if you make money out of it, and Renault would not, with or without a local partner (while it currently makes money almost everywhere in the world) because it does not have the products US customers want. The weak point of Renault’s internationalisation is China, and there also Chrysler couldn’t help.

    FCA wanted to get access to EV tech, and gain some stability by joining a group, it’s no secret they’re short on investments. The potential benefits for Renault are to be defined IMO.

    Merging two giants cannot wait 5 more days, really ? Or they didn’t want anyone having a fresh and cool look at this offer ?

  • PEG

    It’s not “presence” in the US that’s important, it’s having customers, lots of faithful customers, and I don’t see US customers buying small efficient hatchback with a French badge, just like they’ve stopped buying Fiat 500 after a few months. In this very case, I thing the French government did the right thing, postponing the talks 5 days to try to have Nissan on board shouldn’t be an issue when merging 2 giants.

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