Fiat Chrysler withdraws from proposed merger with Renault

Fiat Chrysler withdraws merger offer for Renault blames French politics

"With FCA pulling its merger offer, one has to wonder how much the French state is set on limiting Renault's strategic and valuation opportunities despite having only a 15% stake", analysts at brokerage Jefferies wrote in a note to clients.

"It has become clear that the political conditions in France do not now exist for such a combination to proceed successfully", Fiat Chrysler said in a written statement.

"FCA remains firmly convinced of the compelling, transformational".

Those shared technologies would be critical to generating the billions in synergies that Fiat Chrysler said would accrue from a Renault merger.

Le Maire said the government wants a seat on the merged company's board and a joint headquarters in France.

"It was out of the question to put the alliance in danger for a merger", a French government spokesperson said Thursday.

Earlier Wednesday, it appeared that most of the major issues had been decided between FCA, Renault, and the French government, which is Renault's largest shareholder and, with double voting rights, effectively acts as a gatekeeper for any big decisions involving the automaker.

Relations in the partnership have been under strain since the arrest in November of former Renault and Nissan boss Carlos Ghosn, who awaits trial in Japan on charges of under-reporting his salary for years while at Nissan and using company funds for personal expenses.

Renault delivered a more tempered view.

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Fiat Chrysler's surprise decision to withdraw a merger offer with French carmaker Renault stunned the industry, collapsing Thursday on fundamental differences over when Renault's long-time alliance partner, Nissan, would be brought in.

The merger proposal came at a time when Renault had already been facing challenges as part of an alliance with Japan's Nissan. The ensuing process - including consultations with unions, the French government, antitrust authorities and other regulators - would take about a year.

FCA said that Bigland's incentive pay was subject to a board compensation committee, and that the committee still needs to determine whether he met company and personal performance indicators.

At the time the company said it had a "reserve" stock of cars that had been shipped to big fleet buyers such as rental auto companies but not recorded as sales.

We're expecting further comment from the Renault-Nissan-Mitsubishi Alliance in due course.

Bruno Le Maire said Wednesday on BFM television that the government is keeping up pressure on both carmakers to accept French government conditions for the proposed tie-up. Fiat, on the other hand, saw the French state as the culprit, saying the government repeatedly attempted to change conditions for its support and leaving Elkann with the impression that the state was clamoring for full control of the combined entity - a demand that was unacceptable to Fiat.

French budget minister Gerald Darmanin said he hoped the door had "not closed" on the possibility of a deal, adding Paris would be happy to re-examine any new proposal from FCA.

Some Renault investors had also voiced doubts.

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