Sunday, 21 July, 2019


Fiat Chrysler no longer want to marry Renault-Nissan-Mitsubishi

Fiat Chrysler no longer want to marry Renault-Nissan-Mitsubishi Fiat Chrysler no longer want to marry Renault-Nissan-Mitsubishi
Conrad Doyle | 08 June, 2019, 07:43

The government wouldn't comment on the delay or the tentative deal.

"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".

The person did not want to be identified because details were not included in FCA's statement.

The French government had pushed for more control over the merged company going forward, Automotive News reported, while the FCA controlling shareholder, representing descendants of Gianni Agnelli, had sought to defend the valuation assigned to its company and the potential cost savings.

A source close to FCA blamed the "sudden and incomprehensible" objections of Le Maire's ministry for causing the collapse of the deal. But workers worry a merger could lead to job losses, and analysts warn it could bog down in the challenges of managing such a hulking company across multiple countries.

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.

French finance minister Bruno Le Maire said on Thursday the government had engaged constructively, but had not been prepared to back a deal without the endorsement of Renault's current alliance partner Nissan.

Fiat Chrysler says a merger could save the companies up to 5 billion euros a year as they invest in new generations of vehicles. This request followed two consecutive days of meetings by Renault's board of directors. That's more than General Motors makes, and trails only Volkswagen and Toyota. The French state has a stake in Renault.

Fiat Chrysler had also become increasingly aware of the pitfalls of pursuing a Renault merger without its larger alliance partner's buy-in.

The belief was that the merger would help both companies, which have extensive operations in Europe but lack clout in other markets, including China. The government envisions Boulogne-Billancourt, Renault's home base outside Paris, as the location of the provisional operational headquarters.

The proposed merger had been viewed positively across the industry since it was announced.

Le Maire laid down a red line for Vial, who as his representative at the table was the voice of Renault's biggest and most powerful shareholder.

As we've reported in the past, the USA government has been investigating Fiat Chrysler Automobiles for some time now over its sales reporting methodology.

Italian Deputy Prime Minister Luigi di Maio yesterday said that FCA's pullout showed that political interference can be harmful. Di Maio said in a Facebook message Monday it would bring "a significant added value to Italy" and he "sees our country as one of the protagonists". "Let's take the time to do things well", he said.

A news conference had been tentatively arranged in Paris for the following day, the release all but prepared and Fiat Chrysler CEO Mike Manley flying in from the USA for the occasion.

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