Fiat Chrysler Withdraws Its Offer for Renault

ImageAn assembly line at the Renault factory in Maubeuge, northern France. A merged Renault-Fiat Chrysler would have become the third-largest car company in the world, behind Volkswagen and Toyota.CreditCreditLudovic Marin/Agence France-Presse — Getty ImagesPARIS — Fiat Chrysler late Wednesday abruptly withdrew its proposal to merge with Renault, walking away from a deal that could have…

Fiat Chrysler Withdraws Its Offer for Renault

ImageAn assembly line at the Renault factory in Maubeuge, northern France. A merged Renault-Fiat Chrysler would have become the third-largest car company in the world, behind Volkswagen and Toyota.CreditCreditLudovic Marin/Agence France-Presse — Getty ImagesPARIS — Fiat Chrysler late Wednesday abruptly withdrew its proposal to merge with Renault, walking away from a deal that could have fundamentally reshaped the global auto industry.In a statement Wednesday evening, Fiat Chrysler said it continued to believe that the merger proposal, worth 33 billion euros ($37 billion), was solid, balanced and beneficial to all parties. But it added, “It has become clear that the political conditions in France do not currently exist for such a combination to proceed successfully.”Two people close to the talks said Fiat Chrysler walked away after the French government, Renault’s largest shareholder, requested a delay in a final vote in order to consult with Nissan, Renault’s partner in the world’s biggest auto alliance.Fiat Chrysler saw the effort to postpone the vote as a signal that the deal might ultimately go nowhere, said a person with knowledge of that company’s negotiating position. But the sudden collapse appeared to take the government by surprise.With a total output of 8.7 million vehicles a year, from Ram pickup trucks to tiny Renault Clios, a Fiat-Renault combination would have displaced General Motors as the world’s third-largest car company, behind Volkswagen and Toyota.Fiat Chrysler’s bid underscored the urgency faced by global automakers to share the costs of a momentous industrial transition from internal-combustion engines to electric vehicles and self-driving cars. It would have put pressure on rivals to find partners or be left behind, while new challengers like Tesla and Uber are emerging.Since Fiat Chrysler officially unveiled its proposal on May 26, the plan had faced resistance by some Renault shareholders who argued that the Italian-American conglomerate was undervaluing a crown jewel of French industry. France’s powerful labor union at Renault objected to a deal, warning that it could lead to layoffs.[Read more about why the Fiat-Renault talks fell apart.] The merger talks took a turn after General Electric announced last Thursday that it planned to cut 1,000 jobs in France — a legacy of its 2015 merger with the French energy company Alstom. The move was politically sensitive for President Emmanuel Macron at a time when other foreign companies, including Whirlpool and Ford, are cutting thousands of jobs in France.At that point, the government’s team in the talks, headed by Finance Minister Bruno Le Maire, added new demands, including a pledge to make any
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