UPDATE: Fiat Chrysler Automobiles released a statement confirming that it has withdrawn its merger offer, saying “it has become clear that the political conditions in France do not currently exist for such a combination to proceed successfully.” The full statement can be read below our original story, which continues below.
Fiat Chrysler has withdrawn its $35 billion merger offer for Renault, the Wall Street Journal and Bloomberg News reported on Wednesday.
A source said that FCA had informed Renault it had withdrawn the offer after Renault’s board of directors failed to reach a decision on the merger during a meeting that ran late into the night Wednesday. Instead, the board granted the French government’s request to postpone its vote. The government wanted time to persuade Renault’s reticent alliance partner Nissan.
Renault’s board issued a press release that said simply that it was “unable to take a decision due to the request expressed by the representatives of the French State to postpone the vote to a later Council.”
WSJ reported that Nissan’s two members on Renault’s board were balking, while the rest of the board favored the merger.
The French government wouldn’t it back the deal unless Nissan agreed to maintain its role in the Renault-Nissan alliance, sources said. Nissan had received little advance warning of the merger proposal and was balking. Apparently the French government thought Nissan could be brought around if given more time.
“We should take our time to make sure that things are done well,” French Finance Minister Bruno Le Maire told French television on Wednesday.
When the French requested a delay and Renault’s board granted it, FCA withdrew.
The French state, which owns 15% of Renault, had also been seeking more influence over the merged company, firmer job guarantees and improved terms for Renault shareholders in return for blessing the $35 billion tie-up.
The merger would have created the world’s third-biggest automaker with combined sales of 8.7 million vehicles per year, and was intended to cut costs as the parties develop electric and autonomous vehicles.
Read Fiat Chrysler Automobile’s full statement below:
FCA withdraws merger proposal to Groupe Renault
June 5, 2019 , London – IMPORTANT NOTICE
By reading the following release, you agree to be bound by the following limitations and qualifications: This press release is for informational purposes only and is not intended to and does not constitute an offer or invitation to exchange or sell or solicitation of an offer to subscribe for or buy, or an invitation to exchange, purchase or subscribe for, any securities, any part of the business or assets described herein, or any other interests or the solicitation of any vote or approval in any jurisdiction in connection with the proposed transaction or otherwise, nor shall there be any sale, issuance or transfer of securities in any jurisdiction in contravention of applicable law. This press release should not be construed in any manner as a recommendation to any reader of this press release.
This press release is not a prospectus, product disclosure statement or other offering document for the purposes of Directive 2003/71/EC of the European Parliament and the Council of November 4th, 2003, as amended, in particular, by Directive 2010/73/EC of the European Parliament and the Council of November 24th, 2010, as amended and as implemented in each member State of the European Economic Area and under French and Dutch law.
An offer of securities in the United States pursuant to a business combination transaction will only be made, as may be required, through a prospectus which is part of an effective registration statement filed with the US Securities and Exchange Commission. You may obtain copies of all documents filed with the SEC regarding the proposed transaction, documents incorporated by reference, and FCA’s SEC filings at the SEC’s website at http://www.sec.gov.
The Board of Fiat Chrysler Automobiles N.V. (“FCA”) (NYSE: FCAU / MTA: FCA), meeting this evening under the Chairmanship of John Elkann, has resolved to withdraw with immediate effect its merger proposal made to Groupe Renault.
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. However it has become clear that the political conditions in France do not currently exist for such a combination to proceed successfully.
FCA expresses its sincere thanks to Groupe Renault, in particular to its Chairman and its Chief Executive Officer, and also to the Alliance partners at Nissan Motor Company and Mitsubishi Motors Corporation, for their constructive engagement on all aspects of FCA’s proposal.
FCA will continue to deliver on its commitments through the implementation of its independent strategy.