Nissan Motor Co is opposing renewed efforts by alliance partner Renault SA to merge under a holding company structure, a person with knowledge of the discussions said.
Talks have been ongoing since Renault chairman Jean-Dominique Senard last month made an informal proposal to Nissan chief executive officer Hiroto Saikawa, the person said, asking not to be identified, as the discussions are not public.
Nissan rebuffed the idea then and has continued to oppose it, the person said.
News of the talks came as Nissan is today expected to report its lowest annual operating profit in a decade, hurt by slumping US sales, aging models and a product cycle that is out of sync.
The merger proposal came after the most tumultuous few months in the companies’ two-decade partnership, which was shaken by the arrest of the alliance’s chief architect and former chairman Carlos Ghosn.
Nissan declined to comment on the discussions. Representatives for Renault did not immediately respond to requests for comment.
Japanese broadcaster TBS earlier yesterday reported that Renault had made a formal offer to merge with Nissan under a holding company structure, citing unidentified people.
TBS did not elaborate on what it meant by formal, or when the proposal was made.
The Japanese government has also spurned efforts by Renault to engage in merger talks, the Financial Times has reported.
Although the French automaker in 2015 agreed not to interfere in the Nissan board’s decisionmaking, the Japanese company’s financial weakness could give Renault an opening to push harder for a merger.
The combination would give Renault and Nissan heft as the industry is going through a radical shift toward electric and self-driving vehicles.
The French and Japanese manufacturers, along with third partner Mitsubishi Motors Corp, make 10.8 million vehicles each year — nearly double Ford Motor Co’s global deliveries.
The alliance — held together by a series of cross-shareholdings — would be second only to Germany’s Volkswagen AG, with Toyota Motor Corp a close third.
Renault is treading carefully in its relations with Nissan. Their cross-shareholding is governed by an agreement known as Rama, which was last updated in 2015 with extensive governance provisions that have never been made public.
Any unilateral move by Renault or Nissan to tip the balance could trigger an all-out war for control.
Renault owns 43 percent of Nissan — the bigger partner — which in turn owns 15 percent of Renault, with no voting rights.
The 2015 agreement granted Nissan guarantees preventing Renault from interfering in its governance, a move the Japanese automaker considered necessary, because the French government is Renault’s most powerful shareholder.
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