Apparently, France owns 15% of Renault and is the largest stakeholder of the company.
Fiat Chrysler Automobiles N.V. has reportedly withdrawn its proposal to merge with French automobile company Renault S.A. The deal could have reshaped the global auto industry and helped the automakers compete in the race for self-driving and electric vehicles.
Reportedly, Fiat Chrysler has reached at a conclusion that the political conditions in France do not currently support such a combination to proceed successfully.
Renault earlier stated that the French government had requested its board of directors to postpone the vote on the merger.
Apparently, France owns 15 percent of Renault and is the largest stakeholder of the company. The country’s government had previously indicated that it would support a merger if the companies protected French jobs and auto plants.
Renault was allegedly disappointed not to be able to pursue the merger, which had great financial merit and compelling industrial logic.
According to trusted sources, shares in Renault dropped by almost 7% in Paris after withdrawal of the proposal. Fiat Chrysler stock opened lower in Milan, but later recovered its losses.
The merger would have created the world's third largest carmaker behind Toyota and Volkswagen. General Motors would have fallen to the fourth position in the global ranking.
Reportedly, the proposal was the latest example of established automobile companies looking forward for collaborations to share the costs of emerging technologies including autonomous driving systems and electric vehicles.
Fiat Chrysler owns brands including Dodge, Alfa Romeo, Maserati and Jeep. North America is among its top markets, where Renault does not have a significant presence.
Apparently, when Fiat Chrysler first made the merger proposal last month, the company considered that a combination will produce annual cost savings of over‚¬5 billion ($5.6 billion).
For the record, Renault is already part of a major global partnership with Japanese automaker Nissan and Mitsubishi Motors. Renault and Nissan both own major stakes in the other.
Source credit: https://edition.cnn.com/2019/06/05/business/fiat-chrysler-renault-merger-withdrawal/index.html
