France proposes Nissan-Renault integration under one holding company
The French company also wants to have its say in appointing new head of the car makers' alliance
French authorities proposed the integration of Renault and Nissan under a single holding company, according to Japanese financial newspaper Nikkei.
A delegation including Martin Vial, a Renault director designated by the French government, visited Japan to relay Paris' intentions to Japanese authorities, the newspaper reported, citing unnamed sources.
However, French Finance Minister Bruno Le Maire was quick to play down the reports and said there are no plans to change the structure of the alliance.
“No shareholding re-balancing or modification of cross shareholdings between Renault and Nissan are on the table,” Mr Le Maire said on Sunday, adding that France wanted “solid and stable” governance at the helm of the company.
Initial reports in the French media said, France wants Renault to name Nissan's next chairman, a position that has remained vacant since the November arrest of Carlos Ghosn, an industry titan accused of financial irregularities.
The original alliance between Renault and Nissan gives the French car maker the right to choose top Nissan executives, Nikkei said.
Two months after the arrest stunned Nissan and the global automotive industry, the Japanese car maker is weighing abolishing the chairman role as it steps up reforms to rebuild its governance. The scandal has according to various media leaks, also strained the company’s partnership with Renault, a union held together by Mr Ghosn for two decades.
However, as tensions simmer to surface in Mr Ghosn's absence, France's government – Renault's largest shareholder – has renewed its push for a merger. Nissan has opposed a combination of the two companies, not least because the French government would be a major stakeholder in a shared holding company, potentially giving it greater sway over the Japanese car manufacturer, according to Nikkei.
The French government owns about 15 per cent of Renault, which in turn controls 43.4 per cent of Nissan. Nissan holds only a 15 per cent non-voting stake in its French partner. Renault is expected to appoint Mr Ghosn's replacement soon, according to the Japanese paper, with Paris leading the search for a successor and the new leadership could take a harder line in negotiations with Nissan at the behest of the French government.
Last month, Renault said it planned to name a new director to the board of Nissan and safeguard power within their alliance.
“Renault wants to exercise the possibility to name its directors and this will be done at a shareholders’ meeting,” Mr Vial, told BFM Business, a French business TV station.
Michelin chief executive Jean-Dominique Senard could be a good choice to head Renault, said Mr Le Maire, according to French media reports on Sunday. Asked whether Mr Senard would replace Mr Ghosn, the French minister said: “It is up to the board of directors to examine proposals presented to it by the appointments committee. The French state, as shareholder, will have its say.”
Earlier, Nissan chief executive Hiroto Saikawa, a protege of Mr Ghosn, rebuffed the French car maker’s demand for a meeting of all shareholders to discuss Nissan’s governance, something it would need to do to change its board representation.
The French government has sought integration between the two companies to render the alliance irreversible, a position that some speculate is due to Renault's dependence on Nissan for research and development as well as for much of its profit.
Mr Ghosn was reportedly planning a merger of the two companies before his November 19 arrest. That led to speculation that his fall from grace was part of an internal coup at the Japanese company.
Mr Ghosn is facing fresh charges of improperly receiving €7.8 million (Dh36.9m) in compensation from a joint venture between Nissan and Mitsubishi. A joint investigation by the Japanese companies alleges that Mr Ghosn, was compensated by the JV without any discussion with two other board members – Nissan chief Mr Saikawa, and Osamu Masuko, chief executive of Mitsubishi. Renault has said it found no record of wrongdoing from its own internal investigation.
Nissan holds a controlling stake in Mitsubishi Motors. Mr Ghosn, who made his only court appearance earlier this month, has denied all charges against him and said he "acted honorably, legally and with the knowledge and approval of the appropriate executives inside the company – with the sole purpose of strengthening Nissan".
Updated: January 20, 2019 05:14 PM