Japanese car giant Nissan Motor and French automaker Renault are reportedly in talks to merge after working as in a strategic alliance for almost two decades.
Renault currently owns 43% of Nissan while the Japanese carmaker has a 15% stake in its French counterpart, but now the companies are discussing become one entity with a single stock, Bloomberg reported.
Carlos Ghosn to lead the merged entity?
A merger would allow the companies to better bring together their resources as the market shifts towards electric and hybrid vehicles.
The alliance between the companies, which has included sharing engines and building smaller vehicles on a common architecture, has delivered cost savings but the fragmented ownership has held them back from reaping the full benefits of a merger.
Carlos Ghosn, the chairman of both companies, is understood to be leading the merger negotiations and would head the combined group.
Neither Renault or Nissan have commented on the report.
Earlier this month, Reuters said Nissan was seeking to buy up must of the French government’s 15% holding in Renault.
The state’s shares could provide the biggest hurdle for a merger, Bloomberg reported, citing an analyst at Macquarie in Tokyo.
“The concern has always primarily been the French government, and somewhat Japan, because both France and Japan like to keep their national champions,” the analyst, Janet Lewis, was quoted as saying.
Shares in Renault were up 6.4% in afternoon trading.