Fiat Chrysler Automobiles (FCA) has withdrawn its offer of a “50% merger” with Renault.

If it had gone ahead, the agreement would have created one of the largest car companies in the world, but an FCA statement said that “it has become clear that the political conditions in France do not currently exist for such a combination to take place”. The decision to withdraw the offer was taken at a meeting of the FCA board of directors.

This comment makes direct reference to the fact that, after more than six hours of talks yesterday, Renaults board again delayed the decision on whether to commit to the proposal. The French government, Renaults largest shareholder, had requested the postponement. In a statement, Renault said it “could not make a decision because of the request expressed by the representative of the French state to postpone the vote to a later council.

The FCA had stated that the combined annual revenue from the merger would amount to some £150 billion, with an operating profit of more than £8.8 billion a year. It had also stated that, as a result, consideration would be given to closing plants, with production of around 8.7 million cars per year.

In its withdrawal statement, FCA said that it “remains firmly convinced of the convincing and transformative rationale for a proposal that has been widely appreciated since its submission, whose structure and terms were carefully balanced to offer substantial benefits to all parties.

The FCA thanked Renault, along with its French Alliance partners Nissan and Mitsubishi, for their “constructive engagement” around the proposal.

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