Despite reports early Thursday of a tentative deal with the French government, it seems Fiat Chrysler has in fact withdrawn its 33 billion euro takeover offer for the French carmaker, Renault.
Media reports suggested Fiat Chrysler had reached a sketchy deal with the French government on the merger – the French government is the biggest shareholder in Renault and had been worried about the impact of cost-cutting and possible job losses once the merger had happened and the relationship with Nissan in Japan which had become uneasy after the arrest of former chair, Carlos Ghosn.
The offer was pulled (according to media reports) after the French government asked to delay a decision in order to consult with the company’s Japanese alliance partner Nissan.
The Renault board, after more than six hours of discussion on Wednesday evening at its headquarters in Paris, said 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”.
The Financial Times and the Wall Street Journal reported that Fiat Chrysler decided to pull out after it emerged that the French government and unions were not convinced about the Italian-American company’s reassurances over job security at Renault.
A statement from Renault later confirmed the deal had been dropped.
Coming on top of Trump’s tariff wars with China, Europe and now Mexico, the share prices of major car companies will weaken globally on this news because the Fiat Chrysler-Renault bid was supposed to be the opening of another round of consolidation in the sector.
No longer – if anything the talks with the French government have thrown up new problems in Europe where populist opposition to job cuts and factory closings is rising, shaking the governments across the EU.