Are Nissan and Renault Ready to Merge?
There are rumors swirling around the automotive world that the two main partners in the world’s largest automotive group might be merging together. Of course, we’re talking about Renault and Nissan, who have been tied together since 1999. But why would the two companies come together when their current arrangement has been working so well?
Nissan and Renault have worked together in the Renault-Nissan Alliance (now the Renault-Nissan-Mitsubishi Alliance) for almost twenty years. In the late 1990s, French Renault sent a leadership team to Japan to help save Nissan from collapse. While Renault was clearly the stronger business in the relationship, the alliance operated as a partnership, with each brand maintaining its own identity and the two groups sharing assets and engineering to save money. However, industry experts are wondering if a merger might be ahead to give them a bigger edge in the growing segment of electric vehicles.
To make merger rumors even more complicated, there’s the small fact that Renault is partially owned by the French government. This has been an issue in the past, with the French government trying to gain more control in Renault and the Alliance drawing up new rules to keep that out of its operations together. Bloomberg reports that Renault and Nissan have denied that they are talking about a merger, but they also took special care to also deny that they would try to buy out France’s stake in Renault.
We will be closely watching this situation to see if anything comes out of these merger rumors besides a jump in Renault’s stock price.