A few days ago, we discussed a possible merger between Fiat Chrysler and Renault, which could have resulted in the creation of the largest automobile alliance in the world and helped both companies address weaknesses more effectively.

However, according to latest news reports, the deal is now off the table as Fiat Chrysler has withdrawn the offer of merger. Sources close to the negotiations claim that the French government is to be blamed for its meddling in the deal. The French government had initially insisted on keeping all Renault jobs and plants in France, and then had gone on to demand a say on the merged company’s headquarters location and the constitution of its board.

The withdrawal was announced officially just three hours before both companies were due to present a joint statement providing an update on the progress after getting an approval from Renault’s board.

Another possible issue that caused a strain which could have led to the breakdown in talks could be because of Renault’s alliance with Nissan and Mitsubishi. Ever since the chief of this alliance, Carlos Ghosn, was arrested on charges of financial corruption, this alliance has been in focus over speculation of Nissan trying to gain more control.