Renault, Nissan Will Decide by 2020 Whether to Merge

Renault SA and Nissan Motor Co. have given themselves two years to decide whether to turn their 19-year-old alliance into a full merger, sources tell Bloomberg News.

Any deal would include Mitsubishi Motors Corp., in which Nissan gained a controlling stake in 2016. Carlos Ghosn is chairman of all three companies. Bloomberg says the goal is to implement a merger another structure to more closely bind the companies before Ghosn retires in 2022.

One option would be to create a holding company that owns Renault and Nissan. Bloomberg reported in March that the two companies were discussing whether to merge under a single stock. But since then Ghosn has downplayed the idea of a quick merger.

Under the current structure, Renault owns 43% of Nissan, while Nissan owns 34% of MMC and holds a 15% nonvoting stake in Renault. When the alliance began in 1999, Nissan was struggling to survive. Now the Japanese company is the richer of the two and has bristled at its nonvoting status.

Bloomberg notes that in 2002 carmakers created Renault-Nissan BV, a joint Dutch entity that is equally owned by the two companies and provides the alliance’s strategic management.