Nissan Enlisted Govt. Help to Thwart Renault Merger

April 18, 2019 at 10:03 AM

Last year’s efforts by Carlos Ghosn, then chairman of Nissan Motor Co. and Renault SA, to merge the two companies were being undermined by secret efforts between Nissan and the Japanese government.

France’s Journal du DimancheI cites emails between senior Nissan officials and the country’s Ministry of Economy, Trade and Industry. They show that the two groups were worried that a merger would further diminish Nissan’s clout in an already lopsided equity alliance with Renault.

The 20-year-old partnership is cemented by Renault’s 43% voting stake in Nissan, and Nissan’s non-voting 15% holding in Renault. Mitsubishi Motors Corp., which is controlled by Nissan, joined the alliance in 2017.

Ghosn pledged last year to meet the French government’s demand that he make the alliance “permanent.” France, which owns 15% of Renault, has been active in directing the company’s business affairs. At the time, Ghosn also cautioned that Nissan would resist a merger if France continued as a shareholder.

The emails Bloomberg obtained show that Nissan’s heads of government affairs and the Office of the CEO pushed the ministry to help maintain Nissan’s independence. But they also fretted about triggering too much government involvement.

In a note to Ghosn last May, Nissan government affairs chief Hitoshi Kawaguchi says Nissan asked Japan’s government to “stay behind us to support Nissan to put a brake on France whenever necessary.” Kawaguchi also says that, “though support by the Japanese government is appreciated, it is a private company matter at the end of the day.”