FCA withdraws Renault merger offer [update]

Renault was in less of a hurry to merge than FCA, according to insiders.

Fiat-Chrysler Automobiles (FCA) withdrew its offer to merge with Renault late Wednesday. The company pinned the blame on the French government.

"It has become clear that the political conditions in France do not currently exist for such a combination to proceed successfully," FCA wrote in a statement.

It provided no additional details. The French government owns a 15-percent stake in Renault, so the tie-up required its blessing, and insiders told newspaper Le Monde that government officials wanted to give Nissan time to examine and approve the merger in order to preserve the alliance between the two automakers. They asked Renault to delay its vote by five days; FCA wasn't willing to wait any longer.

Nissan wasn't opposed to the merger, but it hadn't approved it, either. The Japanese firm wanted more time to determine the repercussions the tie-up would have on its business, which includes a controlling stake in Mitsubishi.

The French government also wanted Renault to guarantee that merging with FCA wouldn't endanger jobs in France, that the two companies would have equal control over the jointly-owned company, and that an electric car battery partnership it formed with Germany would continue. Those three conditions were met, it explained, so Nissan's approval was the only missing point.

FCA originally proposed that the companies enter a 50-50 partnership based in Holland and designed primarily to improve efficiencies in the European market and promote global expansion of electrification.