Nissan Bridles at Renault’s Merger Idea

Nissan Motor Co. is open to ways of more closely collaborating with partner Renault SA, but it but won’t accept a plan to merge the two companies under the current alliance structure.

European reports last week indicated that Carlos Ghosn, who chairs both companies, is eager to further integrate the 19-year-old alliance. But an unidentified Nissan executive tells The Nikkei there is “no way” Nissan would accept a full merger of the companies or their business operations.

Renault owns a 43% voting share of Nissan, and Nissan holds a 15% non-voting stake in Renault. The French government currently controls slightly more than 15% of Renault’s equity.

In an earlier round of merger discussions three years ago, France pushed for a merger. But Ghosn said a deal would be impossible unless the state gives up its holding in Renault. In a move to ease Nissan’s fears of government meddling in its business decisions, France agreed that Nissan may increase its stake in Renault if such interference occurs.

The Nikkei points out that terms of Japan’s Companies Act would enable Nissan to nullify the French carmaker’s voting rights by raising its own stake in Renault to 25%. Ghosn previously indicated that balancing voting rights between the two companies, a step the government rejected at the time, would be a key to further integrating their operations.