Wednesday, April 14, 2021

Nissan and Renault Likely To Merge As France Presses Japan

Nissan and Renault are like to merge as the French government has asked Japan accept a possible merger between Renault SA and Nissan Motor Co. following the arrest of Carlos Ghosn, who had managed the alliance of the company, according to sources. 

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The request, which came during talks between French and Japanese officials in Tokyo, reflects President Emmanuel Macron’s wish, the source said. A delegation including Martin Vial, a Renault director designated by the French government, visited Japanese officials to discuss the plans.

The French government is the biggest stakeholder in Renault. Macron last month held talks with Prime Minister Shinzo Abe, in which they only agreed to ensure a stable relationship within the three-way alliance, which also involves Japan’s Mitsubishi Motors Corp.

Nissan is widely seen as hoping to reduce the influence of the French partner on its management and review the alliance to make it more equitable.

Ghosn was arrested in November and has been indicted for allegedly underreporting his compensation in Nissan’s financial statements, among other charges.

Nissan, which brought the allegations to prosecutors following a whistleblower tip, has ousted Ghosn as chairman, while saying it did not have enough checks on his power during his two-decade reign.

Two months after Ghosn’s arrest, the Japanese carmaker is weighing abolishing the chairman role as it steps up reforms to rebuild its governance. The scandal has also strained the company’s partnership with Renault, a union held together by Ghosn for two decades.

Ghosn was reportedly planning a merger between the two carmakers before his arrest. Tension has been rising between Nissan and Renault over their respective powers within each other’s boardrooms. Through complicated cross-shareholdings, Renault owns 43 per cent of Nissan, which in turn owns 15 per cent of the French automaker.

Last month Renault said it planned to name a new director to the board of Nissan and safeguard power within their alliance. “Renault wants to exercise the possibility to name its directors and this will be done at a shareholders’ meeting,” Vial, who is also head of the agency that holds the French government’s stake, said in an interview on BFM Business.

Earlier, Nissan Chief Executive Officer Hiroto Saikawa rebuffed the French carmaker’s demand for a meeting of all shareholders to discuss Nissan’s governance, something it would need to do to change its board representation.

More News at EurAsian Times

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