Fiat Calls Off Proposed Partnership with Renault

Fiat Chrysler has called off its proposed merger that it made to Renault.

The proposed partnership was announced last week with stakeholders in the industry looking up to the partnership as good news for the auto industry.

The merger was proposed to primarily help the two automakers to contribute to increased production of self-driving and electric vehicles.

However, Fiat has pulled out of the proposed merger, citing the prevailing political atmosphere in France as the excuse for pulling out of the partnership.

The company said: “it has become clear that the political conditions in France do not currently exist for such a combination to proceed successfully.”

Renault had previously explained the government’s stance on the proposed merger. The company said that the government set some conditions for the partnership to materialize.

As a 15% shareholder in Renault, the French government indicated her readiness to veto the merger on the condition that both companies should protect the French auto plants as well as ensure their employees keep their jobs.

When the merger proposal was first suggested last month, Fiat explained that both companies will save $5.6 billion from the cost of production with the assurance that none of the plants will give way to the merger.

If the deal has succeeded, the partnership would have replaced General Motors as the third largest automaker in the world behind only Volkswagen and Toyota.

Recently, established automakers are forming partnerships with a view to sharing production expenses and expand their coverage.

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