Merger negotiations between Renault and Fiat-Chrysler have reached a point where continuing would be "unreasonable", the Italian-American carmaker's boss John Elkann said on Thursday after the talks' spectacular collapse. Fiat Chrysler (FCA) had stunned the markets last week by proposing a "merger of equals" with the French group that would create an auto giant spanning the globe, encompassing Renault's Japanese partners Nissan and Mitsubishi Motors.
"When it becomes clear that the conversations have been brought to the point beyond which it becomes unreasonable to go, it is necessary to be equally brave to interrupt them," Elkann wrote in a letter to employees published by Italian media.
The French government, which controls 15 per cent of Renault, gave it a conditional green light but also warned against "haste". It was said by analysts to have been pressing for more control over the new firm alongside Fiat's Agnelli family. But FCA said late Wednesday that the "political conditions in France do not currently exist for such a combination to proceed successfully." Elkann insisted on Thursday that "the decision to start these conversations with Renault was correct, a decision we made after preparing ourselves on all fronts."
"The broad consensus it received was a clear signal that our timing, as well as the balance of what we proposed, was correct," Elkann said that the decision to stop talks was taken to protect the interests of the company and of stakeholders.
"We will continue to be open to opportunities of all kinds that offer the possibility of strengthening and accelerating the realisation of this strategy and creating value," Elkann said.
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