Report: Renault, Nissan in Merger Talks

Alliance partners Renault SA and Nissan Motor Co. are in merger talks, sources tell Bloomberg News.

Renault currently owns 43% of Nissan, and Nissan holds a 15% non-voting stake in Renault. Carlos Ghosn, who chairs both companies, would head the combined companies, which would maintain their current headquarters in France and Japan.

The 19-year-old alliance between the two companies has resulted in billions of euros in savings through shared purchasing, logistics, manufacturing and vehicle platforms. But Ghosn says a full merger—a step he has championed for years—would deliver further gains.

Ghosn has pledged to solidify the Renault-Nissan alliance to make it “irreversible.” He also hopes to double savings to €10 billion by 2022.

A major obstacle to a full merger has been the French government, which owns 15% of Renault. The state is a staunch defender of French jobs and has influenced Renault’s business practices and operations accordingly.

Three years ago Economy Minister Emmanuel Macron, now France’s president, was pressuring Ghosn to merge the companies, while preserving the government’s stake. Ghosn has insisted that a successful merger would require the state to sell its equity in Renault.