The companies Nissan and Renault are in the business for over two decades. After being the leaders of the market for such a long time now the companies are considering a merger. Yes! you read that right. Nissan Renault is now planning to emerge as one company. According to Bloomberg, this French and Japanese manufacturers of the automobile have now decided to come up as one. This will be beneficial in the number of ways as the two companies will join, so will their areas of expertise. This will help them give even better quality products and service to consumers. Followed by the fact that they can form one of the largest publicly traded organization. Therefore, Nissan Renault will have an edge over its competitors especially on manufacturers like Volkswagen and Toyota.
NissanRenault merger will help both the companies as well as will be beneficial to the customers. If the deal gets finalized between the two companies, the companies will look forward to merging their resources as well. This will help to cut the cost and the resources will be driven towards designing and developing electric vehicles. Nissan Renault will also be focusing on manufacturing autonomous vehicles along with coming up with car-sharing service. This merger will further be fruitful for those who have shares in both the companies. Since Nissan would give shareholders of Renault stock in the new organization and so will Renault give stocks to Nissan shareholders. This new company under the label of Nissan Renault will be led by Carlos Ghosn. He is former CEO of Nissan and current CEO of Renault.
On the contrary, this merger is not as easy as it may appear. Firstly, the two different countries need to get involved in this merger. Secondly, the French government already is the stakeholder of Renault. Although its just 15% stake still, the government is involved. Moreover, both Japan and France might not be too happy for this merger as they would have to give up shares of a home-based brand.
Adding on, currently, Renault already has 43% stakes in Nisan whereas Nisan has 15% shares in Renault. However, Carlos Ghosn plans on buying the stake of the French government in Renault.
Adding on, it is intriguing to realize that this merger would mark the end of the bond signed with Mitsubishi in 1999. Due to this collaboration, Nissan managed to gain great interest in Mitsubishi in 2016. Nissan paid a huge sum of money to gain this status. The total amount of $2.3 billion was paid which helped Nissan gain 34% in Mitsubishi. This turned out beneficial for both the organizations. Since they were able to use each other resources, platforms, and technologies.
Let’s wait and hope for the best. The merger will take quite some time. However, it is more important to first find out if this merger will actually take place or if it’s just a bluff.