Fiat Chrysler Withdraws Merger Bid For Renault
(RTTNews) - Fiat Chrysler Automobiles NV (FCAU) on Wednesday withdrew its proposal to merge with the French car-maker Renault (RNSDY.PK, RNSDF.PK, RNT.L), saying that political conditions in France did not support the proposal.
"FCA 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," Fiat Chrysler said in a statement.
"However it has become clear that the political conditions in France do not currently exist for such a combination to proceed successfully," Fiat Chrysler said.
Earlier today, Renault said that it was unable to take a decision on the proposal received from Fiat Chrysler due to the request expressed by the representatives of the French State to postpone the vote to a later Council.
The merger would have created the world's third largest automaker.
The Japanese automobile manufacturer Nissan's (NSANF.PK, NSANY.PK) two representatives on Renault's board were reportedly withholding their support while other board members were planning to submit favorable votes for the merger.
The French government also reportedly said it would not support the merger unless Nissan guaranteed it would continue to collaborate with Renault.
In Late May, Fiat Chrysler Automobiles submitted a 50/50 merger proposal to the Board of Groupe Renault.
FCAU closed Wednesday's regular trading at $13.19, down $0.14 or 1.05 percent. In the after-hours, the stock further dropped $0.66 or 5.00 percent.
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