Renault all set to renew Nissan merger

Bloomberg

Barely three months into his tenure, Renault SA Chairman Jean-Dominique Senard plans to propose merging the French carmaker with alliance partner Nissan Motor Co under a holding-company framework, according to people familiar with the matter.
Each company would own about a 50 percent stake in the holding company and have equal board representation, one of the people said, asking not to be named discussing confidential deliberations. The entity would be headquartered outside France or Japan, possibly in Singapore, the person said.
“What we always said, and we still say the exact same thing, is that what we want is the alliance to be irreversible,” Renault Chief Financial Officer Clotilde Delbos said on the company’s first quarter conference call when asked about its plans. “This is what we are pursuing collectively with Nissan.”
Nissan Chief Executive Officer Hiroto Saikawa rejected a request earlier this month by Senard to reconsider a merger, people familiar with the matter have said. Representatives for Nissan and Renault declined to comment on the holding-company proposal. Nikkei reported on the plans.
The aim of the structure is to cement the alliance and secure cost savings amid a sector downturn, the person said. The proposal is one of several being discussed, and Renault is seeking a plan that Nissan would support, the person said.
Roughly equal ownership would potentially address concerns raised by Nissan, which resisted an effort by former Chairman Carlos Ghosn to permanently unite the two carmakers. Renault owns 43 percent of Nissan, while the Japanese carmaker owns only 15 percent of its partner of two decades, and has no voting power.
Saikawa was opposed when Senard made an overture earlier this month, saying the priority should be rebuilding Nissan, people familiar with the matter told Bloomberg News.
Both companies are struggling. Nissan said it will miss its annual profit goal, and Renault reported a drop in first-quarter sales. Automakers have been contending with a decline in China, the world’s biggest market, and a broader slowdown elsewhere, while a shift towards electrification is placing huge demands on investment capital.
Renault’s operations are focussed mostly in Europe, while Nissan is bigger in the US and China. Mitsubishi Motors Corp is the third partner in the alliance that was dominated by Ghosn over two decades.
Separately, Yomiuri reported that Renault will block Saikawa’s reappointment as Nissan CEO if he doesn’t go along with plans to merge the two companies.
The Financial Times said separately that the Nissan CEO had refused a meeting with an SMBC Nikko banker hired by Renault.
That was followed by a call from a Japanese trade ministry official who told the banker a merger wouldn’t work, the newspaper said.

Ghosn freed on bail again after facing fresh charges
Bloomberg

Carlos Ghosn walked out of a Tokyo detention centre after winning release on bail for second time, giving the deposed auto titan a chance to prepare his defense against charges of funneling millions of dollars from Nissan Motor Co through an intermediary for his own purposes.
A court set Ghosn’s 500 million yen ($4.5 million) bond with three conditions: that he live at a registered
domestic address, that he not leave the country, and thathe adhere to requirements meant to prevent the destruction of any evidence related to the case and other conditions.
Ghosn was freed after prosecutors’ last-ditch appeal of his release was
rejected by the Tokyo district court.
He left the facility with one of his lawyers, Takashi Takano. In a statement issued after his release, Ghosn reasserted his innocence and said he’ll “vigorously” defend himself.
“No person should ever be indefinitely held in solitary confinement for the purpose of being forced into making a confession,” Ghosn said.