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Renault has urged Nissan to negotiate a higher premium from Honda as the French group seeks to benefit from a merger of the two Japanese groups that would create the world’s third-largest carmaker by sales.
According to people with knowledge of the discussions, senior executives at Renault visited Japan to meet Nissan over the past two days to relay its view on the transaction as the two Japanese rivals iron out details of the merger.
Renault has not spoken in detail about the proposed deal but the company has been open to a merger between the two Japanese groups as it aims to sell down its stake in the crisis-hit Nissan.
Nissan and Renault restructured their 25-year alliance in 2023 following constant infighting over their capital structure. Currently, Renault holds a 36 per cent stake in Nissan, including a remaining 18.7 per cent in a French trust, which it has been whittling down. People close to Renault have said the company is open to selling some of its shares in Nissan to Honda if the deal materialised.
During the latest discussions with Nissan, Renault executives called on Nissan not to drag out its talks with Honda in order to focus on reviving its business, one person close to the situation said. As part of its turnaround efforts, Nissan has said it plans to cut 9,000 jobs and a fifth of its production capacity.
“When looking at relative sizes, projected governance and industrial integration, we are talking in reality about Honda taking control of Nissan,” the person added, calling for a “control premium” to be recognised as part of the deal.
Repeating a statement made when Nissan and Honda announced a memorandum of understanding in December, Renault said: “As the main shareholder of Nissan, Renault Group will consider all options based on the best interests of the group and its stakeholders.”
Under the MoU, Honda and Nissan aim to reach a definitive merger agreement for a holding company by the end of June, including fixing the merger ratio.
Honda chief executive Toshihiro Mibe said at the press conference unveiling the talks, that the share ratio would be “decided on the results of due diligence and third-party valuations with reference to the average closing share prices over a certain period prior to the announcement of the MoU”.
Mibe also said that the “majority” of board members of the holding company would be appointed by Honda, in effect admitting that his group would take control, while denying it was rescuing crisis-stricken Nissan.
“Honda would take the lead in pushing this forward in the initial stages,” he said, adding that the company would protect the Nissan brand.
Nissan insiders are concerned about the impact of a potential merger on its brand, citing previous cases of Japan-on-Japan deals such as the Sanyo and Panasonic transaction where the Sanyo brand all but disappeared after the takeover.
Honda announced a hefty ¥1.1tn ($7bn) share buyback on the day of the formal launch of deal talks in an attempt to boost its share price, strengthening its hand in the negotiations.
Nissan declined to comment. Honda did not immediately respond to a request for comment.
