Fiat Chrysler Automobiles NV withdrew its intention to merge with Renault SA, following the French carmaker’s board failed for a second day to reach a conclusion on the proposal, Bloomberg News reported, citing sources familiar with the matter.
The French car maker’s board met to consider the proposal late on Wednesday. Nissan’s two representatives on Renault’s board withheld their support as other board members planned to submit favourable votes for the merger, Dow Jones reported.
Renault said in a press release to directors ” we were unable to take a decision due to the request by representatives of the French State to postpone the vote to a later Council”.
According to media reports, the two companies were exploring a merger in order to curb the costs of producing vehicles and combine resources. The deal would have created the world’s third largest automaker and would produce an estimated $8.7 million in new automobile sales. Dow Jones, reported earlier, citing sources, that the French government would not back the deal unless Nissan guaranteed that Renault’s long-held alliance with Nissan would continue.
The Renault-Nissan-Mitsubishi alliance is a partnership between the French company Renault and the Japanese Nissan and Mitsubishi in the field of mechanical engineering development. The Renault-Nissan alliance was established in 1999. Renault owns 43 per cent of Nissan, and the Japanese company owns a 15-per cent stake in the French partner. In 2016, Nissan bought a 34-per cent stake in Mitsubishi Motors, forming the world’s largest automaker alliance.
Source: News Agencies