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Ghosn: All options 'open' on Nissan-Renault capital structure

Revamped cross shareholdings would likely result in closer integration of carmakers

Carlos Ghosn, chairman of the Renault-Nissan-Mitsubishi alliance, speaks to Nikkei in Tokyo on April 16. (Photo by Manami Yamada)   © Not selection

TOKYO -- Carlos Ghosn, chairman of Nissan Motor and its French partner Renault, said for the first time on Monday that he is reviewing the cross-shareholding arrangement between the two companies.

The comment, in an interview with Nikkei, is likely to spark debate about the control over the Japanese carmaker between the governments in Tokyo and Paris, as well as between the companies.

"All the options are open," Ghosn said regarding a revised structure of the capital alliance, a remark that suggested he is looking at the possibility of closer capital integration of the two companies.

Ghosn said he wants to "find solutions" by 2022 by taking into consideration the opinions of all stakeholders, including the governments in Tokyo and Paris.

The remarks follow a Bloomberg report last month that the two companies are in talks to merge, news that was quickly dismissed by Nissan insiders as unacceptable.

"I would not discard any option today, but I would not privilege any. We are not fixed on one solution," said Ghosn, chairman of the Renault-Nissan-Mitsubishi alliance. "It would be fair to say that all the options are on the table. Some of them are more probable than others because of the sensitivity."

"We just have to find the solution that is acceptable to all," he added.

Taking control of Nissan is a longtime goal of the French government, Renault's largest shareholder, which appears keen on bringing the Japanese automaker under its sway.

The French government owns 15.01% of Renault, which has a 43.4% stake in Nissan. Nissan, in turn, owns 15% of Renault.

Nissan is concerned that closer integration would make the Japanese company more prone to intervention from the French government and make the operations less efficient.

Japan's government could be irked should Renault bring Nissan, which has many core automaking technologies, under its control.

Ghosn noted that Nissan and Renault have made significant progress in the area of operational synergy, through the sharing of key components and the joint procurement of production materials.

"Now, the new need is coming," he said, referring to the necessity of creating a governance structure that will allow the three-way partnership to last beyond the departure of its main architects, such as the 64-year-old Ghosn.

For Ghosn, the alliance is already irreversible, but he admitted that many investors -- such as the French government -- still think that its success depends on the presence of Ghosn himself.

"I need to make sure that everybody is feeling comfortable that this alliance will continue to perform well on the day I'm not here," he said, presumably in 2022. Ghosn was endorsed by Renault for another four-year term as CEO, starting in June.

"Within the next mandate -- 2018-2022 -- we need to find a solution" that would give all investors peace of mind, he said. "That's the time frame I'm giving myself."

Institutionalizing the alliance does not automatically mean a full-scale merger, he stressed. "Partnership, autonomy, strong cooperation, working on the synergies, leaving every company with its own strategy, a strong brand identity -- these will not change," he said.

"Nissan is still Nissan, Renault is still Renault, Mitsubishi Motors is still Mitsubishi Motors -- three companies working with each other without fear to be a second-rated citizen or completely overwhelmed by another party -- that's the key of the success of the alliance," he said.

His task, he said, is to make sure that none of the three companies will drift from the partnership, but also that the alliance will not overwhelm the culture and history of each company.

"I'm not going to put in place an option that I don't consider as good," he said. "Nobody can force me to do that."

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