Renault to restart Nissan merger talks within 12 months

March 28, 2019

Tokyo: France’s Renault SA intends to restart merger talks with Japan’s Nissan Motor Co Ltd within 12 months, after which it will set sights on a bid to buy Fiat Chrysler Automobiles. Renault eyes Fiat Chrysler bid after Nissan merger.

The plans signal a return to the strategies supported by former Nissan boss Carlos Ghosn who held talks about merging Renault with Fiat Chrysler two to three years ago, the report, which cited sources familiar with the matter, said, adding the French government had opposed the move.

Late last year, Ghosn was ousted as Nissan chair and arrested in Tokyo on financial misconduct charges of under-reporting his salary. Ghosn has said the charges were “meritless”.

The recent formation of a new alliance board led by Renault Chairman Jean-Dominique Senard has led to an increase in confidence that the two parties can now push ahead with the merger plans, according to the FT report.

Fiat Chrysler is also seeking a partnership or merger and the company is holding talks with rivals for a deal, the report said.

Nissan and Renault are also expected to revamp their boards, with Renault reducing its board’s size and Nissan adding majority outside directors, the report added.

Nissan, Fiat Chrysler and Renault declined to comment on the FT report.

Renault shares rise 1.3 per cent on Wednesday on the reports that it aims to restart Nissan merger talks within 12 months.

Nissan, Renault and Mitsubishi Motors are retooling their partnership to create a more equal footing between them. Bound by complex cross-shareholdings, the three companies aim to leverage their combined scale to reduce costs for development, procurement and production.

Earlier this month, the three automakers announced they would create an operating board headed by top executives from each of the companies which would oversee the partnership’s operations and governance - a role largely held by Ghosn alone in the past.

The newly appointed chairman of Renault, Jean-Dominique Senard, will serve as head of the alliance but - in a critical sign of the rebalancing - not as company chairman of Nissan, a position which could be left vacant for now, according to people with knowledge of the issue.

Nissan is considering asking ex-Toray Industries chief and Japan Inc heavyweight Sadayuki Sakakibara, who served on the reform committee, to take on the role of chairman of the board at the automaker.

Chairman of Nissan Europe, Italian economist Gianluca De Ficchy, Deputy Executive Vice President Manufacturing & Supply Chain of Alliance Renault-Nissan-Mitsubishi, Jose Vicente de Los Mozos and Nissan Motor Iberica Managing Director, Genis Alonso, held a press conference at the Japanese multinational automobile manufacturer’s production plant in Barcelona on Wednesday. Nissan announced on Wednesday a plan to reduce its workforce by eliminating around 600 jobs at the Barcelona factory, the company’s largest plant in Spain, due to the slowdown in the market.

Meanwhile the Nissan panel to propose bigger role for external directors in Ghosn scandal’s wake. A committee tasked with revamping corporate governance at Nissan Motor Co is expected to recommend on Wednesday a bigger role for external directors in overseeing the Japanese automaker following Carlos Ghosn’s arrest and ouster as chairman.

The independent panel will announce the results of its three-month audit of Nissan’s governance-related procedures, as the company seeks to draw a line under a near two-decade-long period during which Ghosn wielded outsized influence in his dual roles as its chairman and CEO for much of that time. To decentralise the power structure at Japan’s second-largest automaker, the seven-member committee will likely also suggest that the company establish committees for board member nominations, auditing and for determining executive pay, according to a person familiar with the matter.

It may also recommend splitting the positions of company chairman, a role held by veteran top executives, and chairman of the board, who presides over board meetings, and that the latter position should be held by an external director.

Gulftoday