A deal would end the current alliance between the companies and marry them as one corporation, said the people, who asked not to be identified as the details aren’t public. Renault currently owns 43 percent of Nissan while the Japanese carmaker has a 15 percent stake in its French counterpart. Carlos Ghosn, the chairman of both companies, is driving the negotiations and would run the combined entity, the people said.
The parties are discussing a transaction in which Nissan would essentially give Renault shareholders stock in the new company, the people said. Nissan shareholders would also receive shares in the new company in exchange for their holdings, they said. The automaker may maintain headquarters in both Japan and France.
Renault shares jumped as much as 8.3 percent in early trading Thursday, hitting the highest intraday level in more than a decade. They were up 4.2 percent at 10:05 a.m. in Paris, giving the company a market value of about 29 billion euros ($36 billion). Nissan shares are down nearly 2 percent over the past year, giving the company a valuation of 4.6 trillion yen ($43 billion).
Getting a deal done could prove very difficult, the people said. The French government owns 15 percent of Renault and may be reluctant to relinquish control over its stake or have its position watered down. Both the French and Japanese governments would also have to approve a deal and may have strong opinions on where the combined company is domiciled, the people said.
While the companies have claimed a multitude of benefits from their partnership, its staying power could be complicated until imbalances in the companies’ ownership structures are resolved.
Ghosn reiterated last month that Japan wouldn’t agree to a tighter structure if France remains a shareholder. He also said he isn’t trying to convince the French state to reduce its stake in Renault.
“They decide to be here or to get out,” he said. “Frankly, I don’t even open this subject. I just consider that I have the shareholders that I have and I try to satisfy them in the best way possible and as much as possible make sure that they understand our strategy and appreciate our results.”