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Renault and Nissan merger likely to result in new company

Renault and Nissan merger likely to result in new company
Nikhil Puthran Nikhil Puthran Friday 30 March 2018, 16:44 PM

The Nissan and Renault alliance dates back to as early as 1999 and currently, Nissan holds 15 per cent stake in French firm Renault and Renault owns 43 per cent of Nissan's stakes. In an effort to further strengthen their collaboration, this time around, both the companies are in-talks to join hands for car sharing and electric mobility. If talks materialise, it is believed that it might lead to the formation of a new company.

If the collaboration is gets through, it will lead to stronger competition against the Volkswagen AG and Toyota Motor Corp. This will also allow the companies to pool resources, investors and more skill and technology towards the development of new-energy vehicles, autonomous driving, and car-sharing services. Moreover, Renault and Nissan can further save costs by sharing platform and engines. Reports indicate that Renault shares have jumped by as much as 8.3 per cent, which is indeed the highest intraday level in over a decade.

Moving forward, it will take quite a while for the Renault and Nissan alliance to take form. It is believed that the French government’s 15 per cent stake in Renault will make it difficult to get the deal going. Moreover, local legal formalities and regulations will have to be considered before taking the final decision. More details on the merger will be known in the days to come.

 

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