Nissan opposes Renault’s bid for a merger

Nissan Motor logo at the company's global headquarters in Yokohama, Japan. Picture: REUTERS

News of the talks comes as Nissan is set to report on Tuesday its lowest annual operating profit in a decade, hurt by slumping US sales, aging models and a product cycle that’s out of sync. The merger proposal came after the most tumultuous few months in the companies’ two-decade partnership, which was shaken by the shock arrest of the alliance’s chief architect and former chair, Carlos Ghosn.

Japanese broadcaster TBS reported earlier on Monday that Renault had made a formal offer to merge with Nissan under a holding company structure, citing unidentified people. TBS didn’t 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, according to the Financial Times.

The proposal revived by Senard calls for a holding-company structure, which would provide for equal ownership and board representation for Renault and Nissan, people familiar with the situation have said. While the aim of such a structure is to gain Nissan’s support, Saikawa rejected a request in April by Senard to reconsider a merger, people familiar with the matter have said.

In April, Nissan warned investors of bad times ahead as it cut preliminary profit for the year ended March to ¥318bn , a 30% decline from the previous guidance, which itself had been lowered. That would mark the first time the Japanese car maker earned less than Renault in a decade.

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