Skip to main content
Sister Publication Links
  • Automotive News
  • Automobilwoche
  • Automotive News Canada
  • Automotive News China
Subscribe
  • Subscribe
  • Newsletters
  • Login
  • HOME
    • Latest news
    • Automakers
    • Suppliers
    • New Product
    • Environment/Emissions
    • Sales By Market
    • On The Move
    • Auto Shows
    • Munich Auto Show
    • Geneva Auto Show
    • Paris Auto Show
    • Beijing Auto Show
    • Shanghai Auto Show
  • Features
    • Long Read
    • Interview of the Month
    • Focus on Electrification
    • Focus on Technology
    • Segment Analysis
    • Cars & Concepts
    • Supplier Spotlight
    • Europe By The Numbers
  • Opinion
    • Blogs
    • Commentary
    • Guest columnists
  • Photos
    • Photo Galleries
    • Geneva Photo Gallery
    • Beijing Photo Gallery
    • Frankfurt Photo Gallery
    • Paris Photo Gallery
    • Shanghai Photo Gallery
  • Podcasts
  • Car Cutaways
  • Resource Center
  • EVENTS
    • ANE Congress
    • ANE Rising Stars
    • ANE Eurostars
  • More
    • Publishing Partners
    • Social Media
    • Contact Us
    • Media Kit
    • About Us
    • Capgemini: All or nothing: Why circular business models require a holistic approach
    • Capgemini: Invent Head on automotive takeaways from CES 2023
    • Capgemini: Securing the industry's future through a radical rethink
    • Capgemini: Succeeding with the automated driving journey through AI
    • Capgemini: The circular economy is spurring new thinking on EV batteries
    • Capgemini: Toyota and Capgemini leaders on how OEMs can handle industry changes and succeed
    • HEXAGON: Plugging into data is the only way to make winning EVs
    • PUBLICIS SAPIENT: The power of post-purchase: How automakers can maximize customer lifetime value
    • TOYOTA EUROPE: Toyota Motor Europe's next-gen C-HR: sensory innovations revealed by Vehicle UX leader
    • TUV Rheinland: Ideas, services and certifications for smart mobility
    • TUV Rheinland: Testing of automated and autonomous vehicles on test tracks
    • Toyota Europe
    • UFI Filters
    • SENSEAUTO: Driving the future of mobility with SenseAuto: The AGI power behind the wheel
    • Facebook
    • Instagram
    • LinkedIn
    • Twitter
MENU
Breadcrumb
  1. Home
  2. Automakers
June 06, 2019 05:26 AM

Why Fiat Chrysler walked away from Renault merger

Wire reports
  • Tweet
  • Share
  • Share
  • Email
  • More
    Print

    Renault's headquarters on the outskirts of Paris. A board meeting to discuss the merger with FCA was held up three times for consultations, sources said.

    As Renault board members met on Wednesday evening to discuss a merger offer from  Fiat Chrysler Automobiles, it appeared that Renault Chairman Jean-Dominique Senard, FCA Chairman John Elkann and representatives of the French government had ironed out most of their differences.

    Then FCA abruptly walked away.

    Fiat Chrysler blamed French politics. In a statement, it said: "It has become clear that the political conditions in France do not currently exist for such a combination to proceed successfully."

    France's finance minister, Bruno Le Maire, said on Thursday that the government, which has a 15 percent stake in Renault, had not been prepared to back a deal that was not supported by Renault's alliance partner Nissan.

    Nissan had signaled that its representatives on the board would abstain. During the board meeting, French government representatives sought to persuade Nissan to endorse the deal. The meeting was held up three times for consultations, people familiar with the events told Reuters.

    When it came to a vote, the Nissan representatives abstained, the leftist CGT union voted against, and all other directors voted for it. When it was the French state representatives' turn to vote, they insisted that the vote be postponed.

    Renault's Senard requested that Fiat Chrysler grant a delay. Instead, FCA quickly rejected the request, a person familiar with the events said.

    Renault said in a statement that the board was "unable to take a decision due to the request expressed by the representatives of the French State to postpone the vote."

    France's four conditions

     

    France's Le Maire said on Thursday that an agreement had been reached on three of the four conditions. "What remained to be obtained was the explicit support of Nissan," he said in a statement.

    France's four conditions were: respecting Renault's existing alliance with Nissan; keeping jobs in France; forming a balanced corporate governance structure between Renault and FCA; ensuring the new company commit to developing electric batteries along with Germany.

    France’s suggestion that the deal was being rushed enraged FCA, a source told Bloomberg. The Italian side saw the move as a fresh attempt by France to renegotiate a pact that was on the verge of board approval.

    France’s stake would have been halved to 7.5 percent but it gave the impression that the government wanted full control, a demand unacceptable to FCA.

    Questioned by reporters outside his home in Tokyo just hours after the collapse of the deal, Nissan CEO Hiroto Saikawa said he had not heard anything official and repeatedly declined to comment.

    Nissan doubts

    Nissan had earlier indicated that a full merger between Renault and FCA would significantly alter the structure of Nissan's cross-shareholding alliance with Renault and require a fundamental review of their relationship.

    The opposition from Nissan representatives raised doubts about the Japanese automaker's commitment to preserving the alliance if the merger were to proceed.

    In withdrawing the merger offer, FCA's Elkann might have been following the mantra of the automaker's late CEO, Sergio Marchionne, who warned that it is also crucial to end talks without the right conditions. "It's as important to walk away from the table as it is to sit down," Marchionne told Bloomberg in a joint 2014 interview with Elkann at FCA's test track of Balocco in northern Italy.

    Fiat Chrysler had become increasingly aware of the pitfalls of pursuing a Renault merger without its larger alliance partner's buy-in. "Nissan needs to be in the loop," an FCA source told Reuters shortly before the deal fell apart.

    Bloomberg and Reuters contributed to this report

    RECOMMENDED FOR YOU
    Interactive data dashboard: Get the latest Europe sales and other key statistics
    Recommended for You
    Interactive data dashboard: Get the latest Europe sales and other key statistics
    Interactive data dashboard: Get the latest Europe sales and other key statistics
    Seres SF5 2023 IAA Mobiity auto show
    Germany signals China EVs probe will have high burden of proof
    Toyota bZ4X driving down steep incline 2022
    Toyota to speed up EV production, aims for over 600,000 vehicles in 2025, report says
    Main Image Cars
    Sponsored Content: Driving the future of mobility with SenseAuto: The AGI Power Behind the Wheels
    Sign up for free newsletters
    EMAIL ADDRESS

    Please enter a valid email address.

    Please enter your email address.

    Please verify captcha.

    Please select at least one newsletter to subscribe.

    You can unsubscribe at any time through links in these emails. For more information, see our Privacy Policy.

    Get Free Newsletters

    Sign up and get the best of Automotive News Europe delivered straight to your email inbox, free of charge. Choose your news – we will deliver.

    You can unsubscribe at any time through links in these emails. For more information, see our Privacy Policy.

    SUBSCRIBE TODAY

    Get 24/7 access to in-depth, authoritative coverage of the auto industry from a global team of reporters and editors covering the news that’s vital to your business.

    SUBSCRIBE NOW
    Connect with Us
    • Twitter
    • Facebook
    • LinkedIn
    • Instagram

    Founded in 1996, Automotive News Europe is the preferred information source for decision-makers and opinion leaders operating in Europe.

    Contact Us

    1155 Gratiot Avenue
    Detroit MI  48207-2997
    Tel: +1 877-812-1584

    Email Us

    ISSN 2643-6590 (print)
    ISSN 2643-6604 (online)

     

    Resources
    • About us
    • Contact Us
    • Advertise with us
    • Advertise with Us
    • Ad Choices
    • Sitemap
    Awards
    • Rising Stars
    • Eurostars
    • Leading Women
    Legal
    • Terms and Conditions
    • Privacy Policy
    • Privacy Request
    Automotive News Europe
    Copyright © 1996-2023. Crain Communications, Inc. All Rights Reserved.
    • HOME
      • Latest news
      • Automakers
      • Suppliers
      • New Product
      • Environment/Emissions
      • Sales By Market
      • On The Move
      • Auto Shows
        • Munich Auto Show
        • Geneva Auto Show
        • Paris Auto Show
        • Beijing Auto Show
        • Shanghai Auto Show
    • Features
      • Long Read
      • Interview of the Month
      • Focus on Electrification
      • Focus on Technology
      • Segment Analysis
      • Cars & Concepts
      • Supplier Spotlight
      • Europe By The Numbers
    • Opinion
      • Blogs
      • Commentary
      • Guest columnists
    • Photos
      • Photo Galleries
      • Geneva Photo Gallery
      • Beijing Photo Gallery
      • Frankfurt Photo Gallery
      • Paris Photo Gallery
      • Shanghai Photo Gallery
    • Podcasts
    • Car Cutaways
    • Resource Center
    • EVENTS
      • ANE Congress
      • ANE Rising Stars
      • ANE Eurostars
    • More
      • Publishing Partners
        • Capgemini: All or nothing: Why circular business models require a holistic approach
        • Capgemini: Invent Head on automotive takeaways from CES 2023
        • Capgemini: Securing the industry's future through a radical rethink
        • Capgemini: Succeeding with the automated driving journey through AI
        • Capgemini: The circular economy is spurring new thinking on EV batteries
        • Capgemini: Toyota and Capgemini leaders on how OEMs can handle industry changes and succeed
        • HEXAGON: Plugging into data is the only way to make winning EVs
        • PUBLICIS SAPIENT: The power of post-purchase: How automakers can maximize customer lifetime value
        • TOYOTA EUROPE: Toyota Motor Europe's next-gen C-HR: sensory innovations revealed by Vehicle UX leader
        • TUV Rheinland: Ideas, services and certifications for smart mobility
        • TUV Rheinland: Testing of automated and autonomous vehicles on test tracks
        • Toyota Europe
        • UFI Filters
        • SENSEAUTO: Driving the future of mobility with SenseAuto: The AGI power behind the wheel
      • Social Media
        • Facebook
        • Instagram
        • LinkedIn
        • Twitter
      • Contact Us
      • Media Kit
      • About Us