Fiat has withdrawn its offer to merge with Renault after the French car maker’s board had failed to reach a decision earlier this week.

The agreement had stalled because members of the French Government sit on the board and had requested a postponement. 15% of Renault is owned by the French Government, while Nissan owns a further 15% and Renault in turn owns 43% of Nissan.

First Drive - March 2019 - Renault Kadjar - image 4

In statement, the French car maker said: “Groupe Renault expresses its disappointment not to have the opportunity to continue to pursue the proposal of FCA. We are gratified by the constructive approach of Nissan and wish to thank FCA for their efforts and the Renault’s board of directors for its continued confidence.”

It added: “We view the opportunity as timely, having compelling industrial logic and great financial merit, and which would result in a European based global auto powerhouse.”

FCA said it had become clear that “the political conditions in France do not currently exist for such a combination to proceed successfully”, but it added it “remains firmly convinced of the compelling, transformational rationale of a proposal that has been widely appreciated since it was submitted, the structure and terms of which were carefully balanced to deliver substantial benefits to all parties.”