Fleet News

Nissan and Renault on brink of £2.6 billion merger

EXECUTIVES at Nissan Motor in Japan are expected to decide on the fate of a multi-billion pound merger with Renault on Saturday, March 27, which would create the fourth largest motor manufacturer in the world. As Renault formally launched talks with the Japanese firm it issued a brief statement saying that it was 'convinced' of the merits of a strategic alliance.

Under the deal, estimated to be worth £2.6 billion, Renault would take a 35% stake in Nissan, insufficient to give it overall control, but enough to give it effective control as it could veto board decisions. The offer also includes a potential stake in Nissan Diesel, the commercial division of the Japanese manufacturer.

For Renault the deal would bring the international coverage it needs as manufacturers search for economies of scale to cut production costs. It has taken the place of DaimlerChrysler, which pulled out of tentative talks with Nissan earlier this month. Renault is all but trapped in Europe, apart from its US-truck division Mack, and a tie-up with Nissan would give the partnership worldwide coverage by bringing lucrative North American and Far Eastern car markets covered by the Japanese firm.

It could also learn valuable production lessons from Nissan through its Sunderland plant, which last year turned out 288,838 units. For Nissan, the partnership would bring a much-needed cash injection to help it fend off a growing debt mountain, along with guidance on cutting over-production and costs.

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