Fiat Chrysler Automobiles (FCA) has withdrawn its offer of a '50/50 merger' with Renault. If it had gone ahead, the deal would have created one of the world's biggest car firms, but an FCA statement said "it has become clear that the political conditions in France do not currently exist for such a combination to proceed." The decision to withdraw the offer was taken at a meeting of the FCA board.
That comment is a direct reference to the fact that – after more than six hours of talks yesterday – Renault's board again delayed a decision on whether to engage with the proposal. The French government, Renault's largest shareholder, had requested the delay. In a statement, Renault said it was "unable to take a decision due to the request expressed by the representative of the French state to postpone the vote to a later council."
FCA had claimed that combined annual revenues from the merger would be around £150 billion (around Rs 13,10,000 crore), with an operating profit of more than £8.8 billion (around Rs 77,000 crore) a year. The combined output would be around 8.7 million cars a year.
In its statement withdrawing the offer, FCA said that 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."
FCA offered its thanks to Renault, along with the French firm's Alliance partners Nissan and Mitsubishi, for their "constructive engagement" over the proposal.
Analysts had broadly welcomed the possibility of the tie-up between the two firms, with FCA's strength in North America, through its Jeep and Ram brands, giving Renault an opening in that market, and FCA benefitting from Renault and Nissan’s experience with electrified cars, where it is lagging.
FCA also includes the Fiat, Alfa Romeo and Maserati brands. It is not clear if the offer withdrawal spells the end of the potential alliance, or if FCA will talk to other partners instead.
Previously, FCA is also understood to have also held talks with the PSA Group, which comprises Peugeot, DS, Citroen and Vauxhall/Opel, over a partnership. PSA boss Carlos Tavares is known to be keen about growing his firm, with acquisitions or partnerships, and has been strongly linked to a deal with Jaguar Land Rover.
FCA boss Mike Manley is also known to be keen on a partnership, telling reporters at the Geneva motor show that he was open to cooperation with other car firms, “whether it’s partnerships, joint ventures or deeper levels of equity cooperation that makes sense for us and whoever that is.”
James Attwood (Autocar UK)