After nearly 20 years of being tied together in the auto industry, Nissan and Renault are now considering having a merger. Thanks to Bloomberg, we have an insight into some very confidential discussions between the Japanese and French automakers regarding their intentions of coming together and forming a larger single publicly traded company. The merger is going to help the two find better grounds to tackle with other giants in the industry like Toyota and Volkswagen.
If they manage to materialize this discussion, the full merger is going to help both companies pool in their resources to focus on the development of electric vehicles, autonomous vehicles and car-sharing services. The merger would mean that Nissan would be giving Renault shareholders stock in the new company and the existing shareholders of Nissan would be gaining shares in the newly merged company. The most recent report from Bloomberg also confirms the news. Being the existing chairman of both the companies, Carlos Ghosn would head the new company as reports confirm.
This might not be a clean move altogether with the involvement of two different countries from which these two parent companies come from. The French government is itself involved with a 15-percent stake in Renault. Because of this reason, both the French and Japanese governments might not be too willing to abandon their respective shares in their home-based brands.
At present, Renault has a 43 percent stake in Nissan, and Nissan owns 15 percent of its French partner. As reported by Reuters, Ghosn is hoping to strike a close tie, buying the majority of French government’s stake in Renault.
It is also interesting to know that this merger would mean an end of the alliance which had kicked off back in 1999 with Mitsubishi which resulted in Nissan acquiring a controlling interest in 2016. In order to gain this, Nissan had paid a hefty amount of $2.3 billion to acquire 34 percent of Mitsubishi. This allowed the company to share various platforms and many other resources including technology and manufacturing. You can read more about the Nissan and Mitsubishi story below.
This alliance between the three companies had together been working towards achieving a fund worth $200 million in order to invest in various startups. On top of this, the three had pooled together their resources to work towards a stronger presence in the current automobile industry where cutthroat competition has forced many names out of the scene.