Japan unaware of Renault’s plan

FT reported the French manufacturer is aiming to restart merger talks with Nissan within a year

TOKYO • Nissan Motor Co’s CEO and a Japanese government official both said they were unaware of talks about deal-making around the embattled Renault SA-Nissan partnership after a newspaper report projected their merger and then a potential tie-up with Fiat Chrysler Automobiles NV (FCA). France earlier appeared to downplay the possibility.

The Financial Times (FT) reported the French manufacturer is aiming to restart merger talks with Nissan within a year as the first step toward creating a bigger auto conglomerate that could involve a bid by both companies for FCA. Spokesmen for Renault, Nissan and FCA declined to comment on the report.

Nissan CEO Hiroto Saikawa (picture) said yesterday he wasn’t aware of the talks about possible bid for FCA. Also, Japan Chief Cabinet Secretary Yoshihide Suga said the government is unaware of the facts related to reports about Renault restarting the merger talks with Nissan. He added that any specific movement toward maintaining or strengthening the alliance should be discussed “in a manner satisfactory” to the related parties. Mitsubishi Motors Corp CEO Osamu Masuko also said he’s heard ”absolutely nothing” about such talks.

The French state is Renault’s most powerful shareholder with extra voting rights and a 15% stake. “The absolute priority for the French state is the Renault-Nissan Alliance,” government spokesman Benjamin Griveaux said on Wednesday. Decisions made this month about governance should allow it to “get to work”.

Renault and Nissan earlier this month unveiled a new board to govern their alliance, which has been on shaky ground ever since the November arrest of former head Carlos Ghosn, who is awaiting trial for alleged financial wrongdoing. He has denied the charges. Ghosn had planned to cement their alliance, yet such a move faced resistance from within Nissan due to a power imbalance within the two company’s shareholding structure.

The new alliance board led by Renault chairman Jean-Dominique Senard has improved confidence so that the two sides can push ahead with merger plans, the FT reported, citing unidentified people familiar with both sides’ thinking.

A combination of Renault, Nissan, and FCA would create an automaker that could better compete against global competitors such as Volkswagen AG and Toyota Motor Corp. Ghosn held talks about merging Renault with FCA two to three years ago, but was stopped by the French government, according to the report.

FCA is seeking a partnership or merger, and chairman John Elkann has met with other rivals, including Peugeot-maker PSA Group of France, to gauge the possibility of a deal, the newspaper reported.

Renault, which owns 43% of Nissan, has a market capitalisation of €17.3 billion (RM79.58 billion). Nissan, which in turn owns 15% of Renault, has a market capitalisation of about ¥3.85 trillion (RM154 billion), while FCA’s is €20.8 billion. — Bloomberg