Published: Fri, March 30, 2018
Economy | By Melissa Porter

Renault shares surge on Nissan merger talks report

Renault shares surge on Nissan merger talks report

According to a new report from Bloomberg, quoting "people with knowledge of the matter", Nissan and Renault are now discussing a merger to form a new automaker. Renault now owns 43% of Nissan while the Japanese carmaker has a 15% stake in its French counterpart.

Nissan is likely to offer stock in the new company to Renault shareholders.

It is forecast that the headquarters of the merged entity will be based in both the countries. Renault shares have risen to 8.3 percent, reaching the highest level in more than a decade. Nissan shares had shed 0.5 percent to 1,094.50 yen in a market up 0.6 percent overall.

Getting a deal in place might prove hard, said people close to the matter. The French government's 15 percent holding in Renault could prove a stumbling block, the report said, and that no final decision has been made.

Ghosn has pledged to cement Renault's partnership with Nissan, saying in February that the companies would devise a plan to "make the alliance irreversible".

Japanese auto giant Nissan Motor and French automaker Renault are reportedly in talks to merge after working as a strategic alliance for nearly two decades.

Reuters reported earlier this month that Nissan was in talks to buy the bulk of the French government's stake in Renault, citing unidentified people.

The alliance between the two companies said that any discussions related to a share transaction involving two parties was pure speculation.

The deal has yet to be confirmed by either of the two firms, which also partnered with Mitsubishi in 2016. "Nissan and Renault really need to move past the engagement and get married in order to force the kind of changes they need to make to take on Volkswagen and Toyota".

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