Renault - Fiat Chrysler
This picture taken on May 27, 2019 in Turin, shows the logos of Italian-US carmaker Fiat Chrysler Automobiles (FCA) and French auto maker Renault. MARCO BERTORELLO/AFP/Getty Images

Fiat Chrysler Automobiles N.V. (FCA) has postponed -- but not rejected outright -- its decision on whether to accept the proposed merger deal submitted by Groupe Renault on account of stubborn objections from major stakeholders on both sides.

A Renault board meeting Tuesday to study the deal failed to reach a final decision. Renault’s board later said its directors “were unable to take a decision due to the request expressed by the representatives of the French State to postpone the vote to a later Council.”

Media stories said the French government wants onerous conditions attached to the deal. These include job guarantees and an operational headquarters for the combined company based in France. These conditions spelled-out by French Minister of Finance Bruno Le Maire still "need to be met," said media reports. The French government owns 15 percent of Renault.

Le Maire earlier said there is no reason to rush the merger talks, but emphasized he wanted the deal to move forward. “We should take our time to make sure that things are done well,” said Le Maire.

Renault said its board will meet again at the end of the day Wednesday to "continue to study with interest" last week's merger proposal from FCA.

Persons privy to the negotiations said the deal still looks likely despite the mounting obstacles. But apart from French government demands, the deal now has to contend with new criticism from Renault's employee’s union and Nissan Motor Co Ltd.

Nissan CEO Hiroto Saikawa said he doubts if his company will be involved in a Renault-Fiat Chrysler merger. Instead, he suggested adding Fiat Chrysler to the existing Renault-Nissan-Mitsubishi Alliance.

Saikawa said the Renault-Fiat Chrysler deal will "significantly alter" the structure of Nissan's longtime partnership with Renault. As a consequence, Nissan will have to analyze its contractual relationships to protect the company's interests.

The General Confederation of Labor (CGT) union that represents Renault employees assailed company management for not consulting with union representatives about the merger. It called the merger "fundamentally damaging to Renault, its engineering, its industrial strength and its workers."

It slammed the merger as a "gift to the Agnelli family" (Fiat's leading shareholder). It contends Renault is the stronger company and the deal will give away Renault's more advanced electric car technology without gaining anything comparable in exchange.

Analysts said a Renault-FCA merger will create the world's third-biggest automaker. This giant will be worth $40 billion and produce some 8.7 million vehicles a year. Should this merged company also include the Nissan-Mitsubishi Alliance, it will be the No. 1 car producer in the world.