Nissan, Renault reportedly in talks to merge

Renault and Nissan are in talks to merge and create a new automaker that trades as a single stock, people with knowledge of the matter said.

A deal would end the current alliance between the companies and marry them as one corporation, said the people, who asked not to be identified as the details aren’t public.

Renault currently owns 43 per cent of Nissan while the Japanese carmaker has a 15 per cent stake in its French counterpart. Carlos Ghosn, the chair of both companies, is driving the negotiations and would run the combined entity, the people said.

The parties are discussing a transaction in which Nissan would essentially give Renault shareholders stock in the new company, the people said. Nissan shareholders would also receive shares in the new company in exchange for their holdings, they said.

The automaker may maintain headquarters in both Japan and France.

Getting a deal done could prove very difficult, the people said. The French government owns 15 per cent of Renault and may be reluctant to relinquish control over its stake or have its position watered down.

Both the French and Japanese governments would also have to approve a deal and may have strong opinions on where the combined company is domiciled, the people said.

No final decisions have been made and the talks, which have been ongoing for several months, may not result in a deal, they said.

A spokesperson for the Renault-Nissan alliance said the group doesn’t comment on rumours and speculation, while a spokesperson for the French finance ministry declined to comment. Representatives for Yokohama, Japan-based Nissan and Renault also declined to comment.

The alliance forecasts unit sales of 14 million units by 2022, compared with 10.6 million last year. Volkswagen, the world’s largest carmaker, sold 10.7 million vehicles last year.