GM and Renault-Nissan Talks Come to an End

GM and Renault-Nissan talks have finally come to an end. CEOs of both companies today had a conversation over the phone in which both agreed that there is no hope or future for an alliance. There are rumors that GM had more resistance in going through with the talks after a recent demand for payment of a “control premium” if Renault-Nissan purchased 20 percent of GM’s stock. The talks which have been going on for about 3 months have abruptly ended today. Read the press release after the jump.

Press Release:

General Motors, Renault And Nissan Terminate Alliance Discussions

DETROIT, BOULOGNE-BILLANCOURT, TOKYO, October 4, 2006

General Motors, Renault and Nissan said today that they had agreed to terminate discussions regarding a proposed alliance among the three companies.

The parties mutually recognized that significant aggregate synergies might result from the alliance. However the parties did not agree on either the total amount of aggregate synergies or the distribution of those benefits.

Based on its conclusions, GM had proposed that Renault-Nissan provide compensation as part of a potential alliance and for potentially precluding GM from entering other alliance opportunities if Renault-Nissan had made a significant investment in GM.

Renault and Nissan consider that the principle of compensation is contrary to the spirit of any successful alliance.

Source: WSJ and Autoblog

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