France presses Japan to accept Renault-Nissan merger

Paris informs Tokyo it wants Renault and Nissan to integrate

The French government has asked Japan company to accept a possible merger between Renault SA and Nissan Motor Co. following the arrest of Carlos Ghosn, who had managed the alliance of the carmakers, sources close to the matter said Sunday.

The request, apparently aimed at bringing the two automakers under the wing of a new holding company, was made at talks between French and Japanese officials in Tokyo, and reflects French President Emmanuel Macron’s wishes, the sources said.

A delegation including Martin Vial, a Renault director designated by the French government, visited Japanese officials to discuss the plans.

The French government is the biggest stakeholder in Renault with roughly 43% holding.

Macron last month held talks with Prime Minister Shinzo Abe, in which they only agreed to ensure a stable relationship within the three-way alliance, which also involves Japan’s Mitsubishi Motors Corp.

Nissan is widely seen as wanting to reduce the influence of the French partner on its management and review the alliance with the aim of making it more equitable.

To preserve its business identity, by cooperating with the Japanese government Nissan will speed up formulating measures to prevent itself from being integrated with Renault, the sources said.

In 2015, the French government agreed with Nissan and Renault that it would not interfere in the Japanese automaker’s management, but it remains to be seen whether this agreement will hold true.

Ghosn was arrested in November and has been indicted for allegedly underreporting his compensation in Nissan’s financial statements, among other charges.

Nissan, which brought the allegations to prosecutors following a whistleblower tip, has ousted Ghosn as chairman, while saying it did not have enough checks on his power during his two-decade reign.

Renault is expected to put a new leader in place this week by replacing Ghosn as chairman and CEO, since he has been denied bail in Japan. Ghosn has denied all allegations against him.

Two months after Ghosn’s arrest, the Japanese carmaker is weighing abolishing the chairman role as it steps up reforms to rebuild its governance. The scandal has also strained the company’s partnership with Renault, a union held together by Ghosn for two decades.

Ghosn was reportedly planning a merger between the two carmakers before his arrest.

Tension has been rising between Nissan and Renault over their respective powers within each other’s boardrooms. Through complicated cross shareholdings, Renault owns 43 percent of Nissan, which in turn owns 15 percent of the French automaker.

Last month, Renault said it planned to name a new director to the board of Nissan and safeguard power within their alliance.

“Renault wants to exercise the possibility to name its directors and this will be done at a shareholders’ meeting,” Vial, who is also head of the agency that holds the French government’s stake, said in an interview on BFM Business.

Earlier, Nissan Chief Executive Officer Hiroto Saikawa rebuffed the French carmaker’s demand for a meeting of all shareholders to discuss Nissan’s governance, something it would need to do to change its board representation.

Ghosn, known for saving Nissan from the brink of bankruptcy, was sent to the Japanese automaker from Renault in 1999 as chief operating officer. He became Nissan president in 2000 and served as chief executive from 2001 to 2017.

Source: The Japan Times

 

 

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