Here’s how the $37-billion Fiat Chrysler-Renault merger went into the ditch

Fiat Chrysler Chairman John Elkann, shown in Milan, Italy, on May 27, engineered but then pulled the plug on a merger with Renault after objecting to French government demands.

France wanted a commitment from Renault partner Nissan Motor Co. to back the combination. Abstention — as signaled earlier by the Japanese side — wasn’t good enough, Le Maire said, fearing that Nissan might begin undermining the alliance if it couldn’t be held accountable with a firm vote. In Italy, meanwhile, the patience of Fiat Chysler Chairman John Elkann was wearing thin. The scion of the Agnelli family and disciple of thewas also getting updates on the meeting in Paris, and to him, this latest government curve ball was one too many.

This account of the final days of the negotiations leading up to the midnight breakdown is based on accounts from people close to the situation, who asked not to be identified discussing private deliberations. The carmakers and the government declined to comment on the meetings. Nissan’s role in particular was an important sticking point for the government. Senard traveled to Japan in the week after the deal was disclosed for an alliance board meeting, where he took the opportunity to lay out the virtues of the combination with Fiat. France wanted Nissan firmly behind the deal, fearing that any opposition — or even just lukewarm support — would risk alienating a cherished industrial partner over time.

Then the great plan came crashing down, with Bloomberg News reporting in the small hours of Thursday that Fiat had withdrawn its offer.

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