Business / Corporate

Renault again proposed merging with Nissan, this time under post-Carlos Ghosn management

Kyodo, JIJI

Renault SA has again proposed a merger with Nissan Motor Co., according to a source close to the matter, a move that could ignite a feud within the alliance just as its new management is beginning to operate after the removal of Carlos Ghosn.

Nissan rejected the proposal made in mid-April, the source said late Monday. The French government, Renault’s biggest shareholder, made a similar offer in January after the alliance was rocked by the arrest of Ghosn in November, a source said earlier.

Renault is likely to have floated the proposal around the time when the heads of Nissan, Renault and Mitsubishi Motors Corp. held their first meeting of the new management body in Paris on April 12, according to sources.

The rejection could jeopardize the recent momentum for improving ties between the two companies.

“What’s most important is the future of Nissan. I’ll take the approach of using the alliance for the future in doing my job,” Nissan President Hiroto Saikawa said Tuesday, suggesting a negative perception of the merger proposal.

Renault, Nissan’s largest shareholder, is seeking to further solidify its partnership with the Japanese company, which contributes about half of the French automaker’s net profit.

But some Nissan executives view the partnership balance as unfair as Nissan has been seeking an equal capital relationship with Renault, sources said.

Renault holds a 43.4 percent stake in Nissan, which has a 15 percent stake in the French firm without voting rights. Nissan sold 5.65 million vehicles worldwide last year, 1.5 times more than Renault.

The latest proposal comes as the two automakers and Mitsubishi Motors, the third partner in the alliance, launched a new management body in March to steer the world’s second-largest auto group by volume. Renault continues to lead the partnership after Ghosn stepped down, with its chairman, Jean-Dominique Senard, appointed as head of the new body.

Senard was initially expected to focus on mending fences with Nissan while setting aside the merger issue.

While Nissan and Renault have stressed they will work in a “consultative” manner to strengthen the alliance under the new management team, talk of a possible merger or a review of the capital structure between the two automakers remains a source of tension.

In a video message earlier this month, Ghosn, who led Nissan for nearly two decades and was CEO and chairman of Renault, said a “few executives” at Nissan felt threatened about the autonomy of the company due to a possible merger with Renault.

Ghosn was initially arrested in November for alleged financial misconduct at Nissan. He was indicted by Tokyo prosecutors for the fourth time on Monday over alleged misuse of Nissan funds for private purposes.

Chief Cabinet Secretary Yoshihide Suga, when asked for a comment on the Nissan-Renault merger proposal at a news conference Tuesday, said he would refrain from speaking about exchanges between private sector companies.