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'No way' Nissan can accept a merger with Renault, executive says

Japanese automaker on the alert for French government interference

Nissan Motor executives believe the French government is pressuring Carlos Ghosn as it tries to persuade Renault and Nissan to integrate their management teams.   © Reuters

TOKYO/PARIS -- Nissan Motor is growing wary of its top shareholder, Renault. The French government, Renault's largest shareholder, is pressuring its carmaker to integrate the two companies' operations.

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

The Japanese automaker wants to maintain independence and now perceives Carlos Ghosn, who serves as chairman of both companies, as beginning to side with the French government.

According to sources, the French government is talking to financial institutions about how it might be able to get the two companies to integrate their operations.

The sources said recent reports about a potential Renault-Nissan merger that non-Japanese news outlets ran may be part of the French government's strategy to bring the companies together ahead of Renault's general shareholders meeting in mid-June.

Although Nissan's management is open to suggestions for further collaboration, "there is no way" it can accept a merger or business integration, a Nissan executive said.

The French government has shown it would like to influence Nissan and get it to help France's industry grow. But in December 2015, Paris agreed with the two companies that it would not interfere with Nissan's management. At the same time, it acknowledged that Nissan has the right to increase its stake in Renault in response to any unwanted interference in Nissan's management decisions.

This gives Nissan a means to fight back. If Nissan were to increase its stake in the partner to 25% or higher, then the voting rights on the shareholdings Renault has in Nissan would be nullified under the provisions of Japan's Companies Act.

Ghosn fended off the French government's interference when he was Nissan's chief executive officer, a post he vacated in April 2017. The French government is now reportedly pressuring Ghosn by demanding that he rejuvenate Renault's management. In other words, it is suggesting that Ghosn remove himself as CEO.

Paris has also reportedly imposed a number of conditions on Ghosn that he must meet if he is to keep his post.

Ghosn's recent comments and actions have indicated sympathy toward the French government's stance, and Nissan is now on the alert.

Should Renault bring Nissan, which has many core automaking technologies, under its control, the Japanese government could be irked.

In the past, Ghosn pointed out that any significant change in the capital relationship between Nissan and Renault would need the approval of both the Japanese and French governments.

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