French government said to propose Renault-Nissan holding company

Tension has been rising between Nissan and Renault over their respective powers within each others boardrooms
French government said to propose Renault-Nissan holding company
By Bloomberg
Sun 20 Jan 2019 09:01 AM

The French government is proposing to integrate Renault SA and Nissan Motor Co. in a structure that would probably put the two carmakers under a single holding company, Nikkei reported.

A delegation including Martin Vial, a Renault director designated by the French government, visited Japanese officials to discuss the plans, Nikkei reported, without saying where it got the information. Renault also wants to appoint Nissan’s next chairman following the arrest of Carlos Ghosn, the newspaper said. The auto titan is accused of financial crimes that could put him behind bars for decades.

Two months after the arrest stunned Nissan and the global automotive industry, 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, Nikkei said. An email sent to Nissan spokesman Nicholas Maxfield went unanswered Sunday.

Tension has been rising between Nissan and Renault over their respective powers within each others 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.

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