Renault again proposed merging with Nissan

Nissan Motor logo

Renault SA has once again proposed a merger with Nissan Motor, according to a source knowledgeable with the matter, a move that could fire up a feud within the alliance just as its current management is starting to operate following the removal of Carlos Ghosn.

Nissan declined the proposal made in mid-April, the source stated. The French government, Renault’s biggest shareholder, made the same offer in January after the arrest of Ghosn in November, a source said previously.

Renault is likely to have floated the merge proposal around the time when the heads of Nissan, Renault and Mitsubishi Motors held their first meeting of the new management body in Paris on April 12.

The rejection could jeopardize the new momentum for enhancing ties between the two automakers.

“What’s most important is the future of Nissan. I’ll take the approach of using the alliance for the future in doing my job,” said Nissan President Hiroto Saikawa, signaling a negative perception of the merger proposal.

Renault, Nissan’s largest shareholder, is looking forward to further solidify its partnership with the Japanese automaker, which contributes about half of the French automaker’s net profit.

But some Nissan executives deem the partnership balance to be unfair as Nissan has been seeking an equal capital relationship with Renault, sources stated.

Renault owns a 43.4 percent stake in Nissan, which has a 15 percent stake in the French company without voting rights. Nissan sold 5.65 million vehicles globally last year, 1.5 times over Renault.

The recent proposal comes as the two automakers and Mitsubishi Motors, the third partner in the alliance, started a new management body in March to steer the world’s second-largest auto group by numbers. Renault is still leading the partnership after Ghosn stepped down, with its chairman, Jean-Dominique Senard, selected as head of the new body.

Senard was at first expected to focus on mending fences with Nissan while setting aside the merger proposal.

While Nissan and Renault have stressed they will collaborate in a “consultative” manner to enhance the alliance under the new management team, talk of a possible merger or a evaluation of the capital structure between the two automakers is still a source of tension.

Leave a Reply

This site uses Akismet to reduce spam. Learn how your comment data is processed.