Monday 23 July 2018

Renault and Nissan in talks to merge as industry is transformed

Renault currently owns 43pc of Nissan while the Japanese carmaker has a 15pc stake in its French counterpart. Photo: Reuters
Renault currently owns 43pc of Nissan while the Japanese carmaker has a 15pc stake in its French counterpart. Photo: Reuters

David Welch, Ed Hammond and Kiel Porter

Renault and Nissan are in talks to merge, seeking to solidify their two-decade-old alliance under a single stock as an unprecedented shift toward electric and shared cars transforms the industry, people with knowledge of the matter said.

A deal would end the current alliance between the companies and marry them as one corporation, said the people, who asked not to be identified as the details aren't public. Renault currently owns 43pc of Nissan while the Japanese carmaker has a 15pc stake in its French counterpart. Carlos Ghosn, chairman of both companies, is driving the negotiations and would run the combined entity, the people said.

Merging will create a formidable rival to Volkswagen and to Toyota, allowing the partners to better pool resources as the industry shifts toward new-energy vehicles, autonomous driving and car-sharing services. The current alliance has brought savings, but fragmented ownership limits the benefits. "Size matters in the auto industry," said Janet Lewis, an analyst at Macquarie, in Tokyo.

"The concern has always primarily been the French government, and somewhat Japan, because both France and Japan like to keep their national champions."

The parties are discussing a transaction in which Nissan would essentially give Renault shareholders stock in the new company, the people said.

Nissan shareholders would also receive shares, and the firm may maintain headquarters in both Japan and France. (Bloomberg)

Irish Independent

Business Newsletter

Read the leading stories from the world of Business.

Also in Business