PARIS - Fiat Chrysler said it has abandoned its $35 billion merger offer for Renault, blaming French politics for scuttling what would have been a landmark deal to create the world’s third-biggest automaker.
The French government, which owns a 15% stake in Renault, had also pushed Fiat Chrysler for guarantees that France would not lose jobs, and for a dividend to be paid to Renault shareholders, including the government, people familiar with the talks said. Fiat Chrysler’s original proposal offered no special dividend to Renault shareholders.
Fiat Chrysler had proposed that its shareholders receive a 2.5 billion euro special dividend as part of the merger, had it been completed.The two companies told investors a merger would cut operating costs and investments by 5 billion euros or more a year. Fiat Chrysler stood to gain access to Renault’s superior electric drive technology to meet mandates for zero-emission cars.
The sudden end to the merger talks came after midnight in Paris, after Fiat Chrysler and French government officials had reached a tentative agreement that cleared the way for Renault’s board to consider moving forward, people familiar with the situation said. Fiat Chrysler’s decision to walk away is a defeat for Senard, former head of tire maker Michelin. He invested heavily in the proposal to merge with Fiat Chrysler, and traveled to Japan last week to make the case personally to executives of Nissan and third alliance partner Mitsubishi that a merged Renault-Fiat Chrysler could work closely with them as well.
Vive la France! 🙃
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