Fiat cites French politics to withdraw Renault merger proposal
Fiat Chrysler Automobiles and Groupe Renault's merger would have created the third-largest OEM in the world
The board of Fiat Chrysler Automobiles has withdrawn its proposed merger with Groupe Renault owing to contemporary political conditions in France, which Fiat said would not allow it to successfully tie up with the French automaker.
The board’s decision comes weeks after Fiat submitted a non-binding letter to the board of Groupe Renault proposing a 50-50 merger of the two automobile giants.
A statement released by the group’s board said: “[Fiat] 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.
"However it has become clear that the political conditions in France do not currently exist for such a combination to proceed successfully," the statement added.
In a separate statement, Groupe Renault expressed its disappointment over not being able to accept the merger proposal with fiat.
The merger of Fiat and Groupe Renault would have created the third-largest original equipment manufacturer (OEM) in the world with 8.7 million vehicle sales.