Published: Fri, March 30, 2018
Money | By Wilma Wheeler

Nissan and Renault Talking Merger

Nissan and Renault Talking Merger

The French government's 15 percent holding in Renault could prove a stumbling block, the report said, and that no final decision has been made.

Bloomberg noted that the parties are discussing a transaction in which Nissan would essentially give Renault shareholders stock in the new company. A deal would end the current alliance between the companies and marry them as one corporation, is what is learnt by people in the know.

Shares in French automaker Renault shifted up several gears yesterday, reaching the highest level in a decade, following a report that it was in talks with its alliance partner Nissan about a merger. The shareholders of Nissan will also receive stocks in the combined entity in lieu of their assets. It is believed the new automaker may maintain two headquarters, one in Japan and one in France, but there's also a possibility for a single HQ in London or somewhere in the Netherlands. In February this year, Carlos Ghosn, the chairman of Renault SA, announced that both the renowned automobile manufacturers will draft a plan to strengthen their alliance and make it irreversible.

Shares in Renault rose by more than 8% in early trading on the report in the French capital. Shares of Nissan have been down close to 2% over the past year.

But a merger could prove to be very hard, as both the French and Japanese governments would have to approve it.

Both the firms are looking forward towards increasing their collaborations to 10 billion euros by 2022 from 2016. Nissan took a 34 percent stake in Mitsubishi Motors in 2016, a tie-up which allowed the alliance to claim the title of the world's largest carmaker previous year with 10.6 million vehicles sold. "Frankly, I don't even open this subject".

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