Wedding atmosphere in the car market. The French Renault and the Japanese Nissan, allies for years, are considering the possibility of merging under the banner of a new holding. The Wall Street Journal wrote it, specifying that the shares would be divided approximately 50% between the shareholders of the two companies.
According to rumors reported by the American newspaper, Nissan has not yet received a detailed offer: “It's not a hostile offer. It is clear that the alliance is not functioning adequately,” the sources said, referring to the Renault-Nissan-Mitsubishi (formerly Renault-Nissan) industrial group, linked by cross-shareholdings.
The same sources reveal that "there are ongoing negotiations on various issues, for example a change in the capital structure, a better integration of management or greater complementarity on projects". One thing is certain, namely that "things cannot remain as they are".
The original alliance had been created in 1999 to address Nissan's financial difficulties: Renault had bought part of the Japanese group and, with the aim of restructuring it, had entrusted the leadership of the group to Carlos Ghosn, then finished in the eye of the storm for financial crimes (he was arrested last November 19, then released on bail for the first time in March and again yesterday, after the second arrest in April).
In the alliance, Nissan is clearly the largest company, but in cross-shareholdings it is penalized, because it has a 15% stake in Renault, while the French group holds 43,4% of Nissan. An imbalance that has long created discontent among the leaders of the Japanese group.
Moreover, the Japanese group recently issued its second profit warning of the year, lowering 30 operating profit estimates by about 2019%.
Now, by proposing the creation of a new holding company, Renault wants to give a convincing answer to investors' concerns about the deterioration of Nissan's results.
In turn, Nissan fears that Renault wants to force its hand on the merger to take advantage of its partner's current weakness.
However, the new president of Renault, Jean-Dominique Senard, has assured that the creation of a new holding would allow the companies to leave behind the disputes over the shareholding and to concentrate on relaunching the activities.
