Ghosn Reportedly Wanted to Merge Nissan and Renault Brands Before His Arrest: Report

Nissan's board of directors apparently did not like this idea, making the likelihood of a future unification even less likely.

Carlos Ghosn, chairman and chief executive officer of Nissan Motor Co. and Renault SA, speaks during the 2017 Consumer Electronics Show (CES) in Las Vegas, Nevada, U.S., on Thursday, Jan. 5, 2017. Nissan is betting that regulators will find it easier to approve vehicles that have all the capabilities of a self-driving car but are supervised by humans miles away. Photographer: Patrick T. Fallon/Bloomberg
Patrick T. Fallon/Bloomberg via Getty Images

Prior to the high-profile arrest of Renault-Nissan-Mitsubishi Alliance CEO Carlos Ghosn over underreporting his compensation and other “significant acts of misconduct,” he allegedly had ambitious plans of merging the Nissan and Renault brands, according to a report from the Financial Times.

On a corporate level, Nissan informally plays second fiddle to Renault. Renault owns 45 percent of Nissan and the French brand even has the power to appoint senior executives for the Japanese company. For reference, Hyundai only owns 33.88 percent of Kia and those two brands are especially similar, at least in their automotive product portfolios. Nissan, on the other hand, owns only 15 percent of Renault and a sizable 34 percent of Mitsubishi while Renault owns zero percent of the rebuilding automaker.

So, this “alliance” is a little complicated. In an effort to simplify how the three brands interact with each other, Ghosn was reportedly planning on merging Nissan and Renault, allowing the newly formed entity to join together within months from now. Sources close to the matter, which were cited by Financial Times, say that Nissan’s board was opposed to the potential merger fearing further entrenchment in the company acting as a subsidiary of Renault.

The merger idea apparently soured the previously good relationship between Ghosn and Nissan CEO Hiroto Saikawa. Ghosn was allegedly displeased with how the Nissan brand was performing under Saikawa’s leadership, particularly in China and the U.S., and Saikawa didn’t like the idea of Renault having access to his brand's cash reserves of more than $10 billion.

With such strong opposition to the merger from Nissan's board and with the pending firing of Ghosn following his arrest, it would appear that the Renault/Nissan brand merger is dead, at least for now. The future of this idea depends partially on the whims of Ghosn’s eventual permanent replacement.

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