Nissan and Renault Might Merge to Form New Company

Renault and Nissan are in talks to merge, seeking to solidify their alliance under a single stock as an unprecedented shift toward electric and shared cars transforms the industry. The companies have been in a strategic alliance since 1999.

A deal would end the current alliance between the companies and marry them as one corporation, according to a Bloomberg report. Renault currently owns 43% of Nissan while the Japanese carmaker has a 15% stake in its French counterpart. Carlos Ghosn, the chairman of both companies, is driving the negotiations and would run the combined entity, the report said.

Carlos Ghosn, chairman and chief executive officer of Nissan Motor Co. and Renault SA, Photographer: Patrick T. Fallon/Bloomberg

A merged giant would be a more formidable rival for Volkswagen AG and Toyota Motor Corp., allowing the partners to better pool resources as the industry shifts toward new-energy vehicles, autonomous driving and car-sharing services. While the alliance of Renault and Nissan has brought savings, the fragmented ownership structure has prevented the companies from reaping full benefits from their union.

The parties are discussing a transaction in which Nissan would essentially give Renault shareholders stock in the new company. Nissan shareholders would also receive shares in the new company in exchange for their holdings. The automaker may maintain headquarters in both Japan and France.

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