Cleveland, Ohio – Barely a week after announcing merger talks with French automaker Renault, Fiat Chrysler Automobiles (FCA) has pulled its bid for a deal that could have created the world's largest car company, blaming intransigence from the French government.
"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," officials said in announcing the deal's collapse. "However, it has become clear that the political conditions in France do not currently exist for such a combination to proceed successfully."
The French government owns 44 million shares of Renault, about 15% of the company, making it the largest shareholder. As such, it can influence or reject deals that it believes will harm French jobs or national interests. Merging with FCA could have diluted the country's control over one of its largest industrial employers.
About the author: Robert Schoenberger is the editor of Today's Motor Vehicles and a contributor to Today's Medical Developments and Aerospace Manufacturing and Design. He has written about the automotive industry for more than 19 years at The Plain Dealer in Cleveland, Ohio; The Courier-Journal in Louisville, Kentucky; and The Clarion-Ledger in Jackson, Mississippi.