France’s government is putting on a brave face following FCA’s decision to pull the plug on its proposed merger with Renault , asking its domestic manufacturer for short pause to secure the agreement of all parties.
Last night (5 June) FCA withdraw with immediate effect its merger proposal made to Renault, but the French State, as a 15% shareholder of its domestic manufacturer, is still holding out a faint hope the transaction can be resurrected.
FCA had argued a tie-up could yield big efficiency and scale advantages for both, creating a combination that become the global auto industry’s third largest company with sales and production approaching 9m units a year.
Specifically, French Finance Minister, Bruno Le Maire has asked the Renault board to delay any vote on a merger until 11 June, but FCA’s forthright stance may have sunk the deal below the waterline in any case.
“Bruno Le Maire takes note of the FCA’s decision to withdraw its merger offer with Renault,” said a French Finance Ministry statement. “When this offer was presented, Renault’s State shareholder of 15.1% welcomed it openly and worked constructively with all stakeholders.
“The State had set four conditions for its final agreement:
- Completion of this operation in the framework of the alliance between Renault and Nissan
- Preservation of industrial jobs and plant in France
- A governance respectful of the equality between Renault and FCA
- Participation in the future electric battery industrial project committed to with Germany
“Agreement had been found on three of these conditions. There still remained the explicit support of Nissan. The State therefore wishes the board to grant an additional delay of five days to ensure the support of all stakeholders.
“Renault, at the heart of the Alliance, holds all the attractions to overcome the challenges with which the automotive sector is faced, notably when it comes to electric vehicles and emissions reduction.”
Whether FCA will now reconsider its decision is not yet known, but it had previously insisted a merger could yield big efficiency and scale advantages for both, creating a combination that become the global auto industry’s third largest company with sales and production approaching 9m units a year.
Despite the forcefulness of FCA’s abrupt termination of the merger, the French government still appears to be hopeful a deal can be fashioned.
Further details are expected later.