A merger of Fiat Chrysler Automobiles and Renault is no more

SUDDEN, SURPRISING and “transformative”. The description could apply both to the proposed merger between Fiat Chrysler Automobiles (FCA) and Renault announced on May 27th and its demise only ten days later. Late in the evening of June 5th the Italian-American firm, which had approached its French counterpart with the offer, announced that it was withdrawing the proposal. The share prices of both companies fell on the news. The rapid implosion of a deal that was intended to secure the futures of both carmakers as the industry undergoes fundamental change is a huge blow for its architects. It shows that the much-needed consolidation of the car industry will be fiendishly hard to pull off.

The deal looked like a winner for both parties. Their complementary strengths in regions and products, plus a chance to share investment in electrification and self-driving cars, had convinced John Elkann, the chairman of FCA (who sits on the board of The Economist’s parent company), and Jean-Dominique Senard, his counterpart at Renault, of the wisdom of combining the two firms. This would create the world’s third-biggest carmaker. If Renault’s Japanese partners, Nissan and Mitsubishi, got on board, the firm would become a colossus making 15m cars a year—almost half as much again as their closest competitors.


via Business Feeds

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