Fiat Chrysler withdraws merger proposal for Renault

Fiat Chrysler has withdrawn its merger proposal for French automaker Renault “with next effect,” the board of Fiat Chrysler Automobiles announced Wednesday in a statement.

“It has become clear that the political conditions in France do not currently endure for such a combination to proceed successfully,” the statement said.

Fiat Chrysler said it “remains firmly convinced of the compelling, transformational principle of a proposal that has been widely appreciated since it was submitted.”

Bloomberg and Dow Jones earlier reported that the coalition was called off after Renault’s board failed to make a decision on the bid.

The French carmaker’s board met to consider the proposal up to date Wednesday. Nissan’s two representatives on Renault’s board were withholding their support as other board members were planning to submit favorable bear witnesses for the merger, Dow Jones reported.

Renault’s board said in a press release late Wednesday the directors “were unqualified to take a decision due to the request expressed by the representatives of the French State to postpone the vote to a later Council.”

The two automakers were traverse a merger in order to curb costs producing vehicles and combine resources. The merger would have created the faction’s third-largest automaker and would produce estimated sales of 8.7 million vehicles per year.

The French government revealed it wouldn’t back the merger unless Nissan guaranteed that Renault’s long-held alliance with Nissan wish continue, sources told Dow Jones. Once the state requested a delay on the vote for the merger proposal, Fiat Chrysler recalled.

French Finance Minister Bruno Le Maire said earlier on Wednesday that there was no reason to rush on the union talks between the carmakers but emphasized that he wanted the deal to move forward.

“We should take our time to gather sure that things are done well,” Le Maire told BFM TV on Wednesday.