Renault and Nissan to merge?

Renault and Nissan to merge?

The French government's 15 percent holding in Renault could prove a stumbling block, the report said, and that no final decision has been made. While the alliance of Renault and Nissan has brought savings, their ownership structure differs and this limits the companies from reaping full benefits from their alliance.

Bloomberg noted that the parties are discussing a transaction in which Nissan would essentially give Renault shareholders stock in the new company. Also, the French government still owns 15 percent of Renault and may be unhappy to reduce its impact.

According to Bloomberg's sources, who aren't being identified at their request, it would mean the end of the companies' alliance and make them one corporation.

A report that Renault and Nissan could extend their alliance to a full merger has powered shares in vehicle firms across Europe. The automaker might maintain its headquarter in France as well as Japan.

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The idea behind the AI stake sale is that the new owner of the company will hopefully revive the company and turn it profitable. In the second stage, the highest bidder would be declared as the buyer after requisite security clearances.

Carlos Ghosn, the chairman of both companies, is understood to be leading the merger negotiations and would head the combined group. Nissan shares are down almost 2% over the past year, giving the company a valuation of 4.6 trillion yen ($43 billion).

But a merger could prove to be very hard, as both the French and Japanese governments would have to approve it.

The deal has yet to be confirmed by either of the two firms, which also partnered with Mitsubishi in 2016. "I just consider that I have the shareholders that I have and I try to satisfy them in the best way possible and as much as possible make sure that they understand our strategy and appreciate our results".

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