Just over one week ago, Fiat Chrysler executives laid out a formal offer to a “merger of equals” with French automaker Renault. Today, according to the Wall Street Journal, that offer has been abruptly rescinded after the second day of negotiations came to a close.
According to WSJ sources, the negotiation process came to loggerheads when Renault coalition partner Nissan refused to back the merger. With two Nissan representatives on the Renault board offering abstentions in the vote, both FCA and Renault were concerned that Nissan would back out of the alliance.
Without Nissan’s unequivocal assurance that it would remain a partner to Renault following the $40 billion merger, the French government would not pledge its support of the deal. The French state asked all parties involved to postpone the vote until a formal Nissan decision had been made. Rather than go along with the postponement, Fiat Chrysler rescinded the deal altogether and walked away from the negotiation table, sources say.
Update Wednesday June 5, 9:10 PM ET:
In a statement released by FCA Wednesday evening the company thanked Groupe Renault and its Alliance partners Nissan and Mitsubitshi for their collective time. The statement affirmed the company has withdrawn the merger proposal with immediate effect, and continued with the following absolutely befuddling paragraph:
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.
Basically, Fiat Chrysler is saying “We still think this is a great idea, but those ding dongs disagreed. Screw you guys, we’re going home.” but in nicer legalese language.