Hon Hai Precision Industry Co (鴻海精密), the iPhone maker known as Foxconn Technology Group (富士康科技集團) internationally, is in talks with Nissan Motor Co’s biggest shareholder Renault SA about its willingness to sell its shares in the Japanese automaker, the Central News Agency (CNA) said, citing people it did not identify.
Nissan and fellow Japanese automaker, Honda Motor Co, are exploring a merger that would create a rival to Toyota Motor Corp in Japan and better position the combined company to face competitive challenges around the world, people familiar with the matter said on Wednesday.
However, one potential spanner in the works is Foxconn, which separately is said to have approached Nissan about acquiring a stake.
Photo: Annabelle Chih, Bloomberg
Foxconn has been investing heavily in factories to build electric vehicles (EV) and Nissan, which has slashed its earnings forecasts and is culling 9,000 jobs globally, needs a financial rescue.
CNA said that Jun Seki, chief strategy officer for Hon Hai’s EV arm, told Nissan about Foxconn’s interest in buying its shares, but Nissan did not respond in a favorable manner.
As a result, Seki has started to engage Nissan’s 36 percent shareholder, Renault.
Seki and his team are currently in talks with Renault in France, the report said.
Renault’s stake in Nissan is a holdover from a longstanding alliance between the French automaker, Nissan and Mitsubishi Motors Corp.
Meanwhile, Honda has threatened to end its strategic software partnership with Nissan if it looks to join hands with Foxconn, Nikkei said in an earlier report.
Should the approach from Foxconn turn hostile after a rebuff, Honda also offered to protect Nissan as a white knight investor, Nikkei said.
Official talks, including about a possible merger, between the two Japanese companies might start as soon as Monday, Nikkei added.
Honda’s shares fell more than 2.5 percent in early trading yesterday, while Nissan’s stock was trading down 6.5 percent after jumping a record 24 percent on Wednesday.
Honda is weighing several options, which include a merger, a capital tie-up and even the formation of a holding company, Honda executive vice president Shinji Aoyama said.
The alliance could also include Mitsubishi Motors, he added.
Representatives for Honda and Nissan did not immediately reply to a requests for comment regarding the start date for talks.
A merger of the Japanese car brands would create a bulwark against the Toyota group at home, and allow Honda and Nissan to pool resources to compete with Tesla Inc and Chinese automakers such as BYD Co in global markets.
“It’s only natural for the consolidation of major carmakers to become more common as the industry undergoes a shift toward vehicles with sophisticated technology,” Subaru Corp chief executive officer Atsushi Osaki said during a group interview in Tokyo on Wednesday.
“We need to join hands to take on challenges too difficult to overcome alone,” he added.
Renault has indicated it is open to the idea of a merger between Honda and Nissan, people familiar with the situation said.
Its approval would be key to any deal.
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