Following their pursuit of a $35 billion fusion with the French car manufacturer Renault, Fiat Chrysler Automobiles (FCA) has opted to retract their proposition and walk away from the agreement. This decision was made as a result of a lack of consensus among the involved parties during a recent meeting held in Paris, France on Wednesday night.
FCA, in a released statement, attributes the withdrawal to the French government, claiming that officials failed to promptly reach a decision as per the timeline outlined in the initial merger documents. The complexity of the situation was heightened by the French government’s 15 percent stake in Renault, which seemingly caused their focus to be primarily on Renault’s valuation, shareholders, and labor relations rather than the collaboration as a whole.
“The Board of Fiat Chrysler Automobiles N.V. (“FCA”) (NYSE: FCAU / MTA: FCA), convened this evening under the Chairmanship of John Elkann, has decided to retract its merger proposal to Groupe Renault with immediate effect,” stated a formal company communication.
John Elkann, the Chairman of Fiat Chrysler, a notable member of Italy’s prestigious Agnelli family and a direct descendant of Gianni Agnelli, tried to uphold the initial terms proposed and managed to “resolve most discrepancies with representatives of the French government, led by finance minister Bruno Le Maire,” as reported by AN. Nonetheless, concerns regarding Renault’s valuation persisted throughout the meeting.
Another major participant in the merger, Nissan, maintained a passive stance for the majority of the process, displaying distance and apathy towards the merger. According to reports, the French Government and Renault pressured Nissan to endorse the merger during the meeting, even pausing negotiations thrice for private consultations. Ultimately, when it was time to approve or decline the merger, Nissan’s board members refrained from voting.
“FCA remains staunchly convinced of the persuasive, transformative rationale of a proposal that has garnered broad admiration since its submission. The configuration and terms of the proposal were meticulously crafted to deliver significant advantages to all involved parties,” affirmed FCA in an official statement.
Renault’s Chairman, Jean-Dominique Senard, alongside other French officials, proposed a postponement of negotiations and voting, suggesting that “discussions could be held with their Japanese counterparts over the weekend in Tokyo on Monday, after the G20 summit, followed by a vote on Tuesday,” as per AN.
In response, FCA promptly rejected the proposal, leading Elkann to revoke their merger bid. This action prompted Renault and French officials to remark that FCA appeared overly eager to seal the deal, contrasting with the French perspective that emphasized the lack of urgency.
“However, it has become apparent that the political circumstances in France are presently unsuitable for such a collaboration to proceed successfully,” declared FCA following the withdrawal.
It remains uncertain whether further negotiations will ensue, or if FCA will indeed abandon this endeavor and move forward as if nothing transpired.