Nissan denies report that Ghosn eyes combined firm with Renault

Nissan denies report that Ghosn eyes combined firm with Renault

Automotive News | March 31, 2011 – 12:01 am EST

TOKYO (Reuters) — Nissan Motor Co. and Renault SA do not have any plans to combine the two firms under a holding company structure, Nissan said, denying a newspaper report citing CEO Carlos Ghosn as saying he was leaning toward such a move.
The Nikkei business daily said early today that Ghosn had told the newspaper that he was looking at putting the automakers under a single umbrella, and that the transition to that structure could take place in two to three years.
Nissan said the report was a misinterpretation of a wide-ranging interview in which Ghosn said that the corporate structure of the Renault-Nissan Alliance would remain dynamic.
“There are currently no plans to form a single holding company for both Renault and Nissan,” Nissan said in a statement today.
The statement added: “Mr. Ghosn did not say or imply that Renault and Nissan are ‘leaning toward establishing a holding company’ as the publication reported”
Investors unhappy
Ghosn has been under pressure from Renault shareholders to review the capital structure of the Franco-Japanese alliance, with about $17 billion of a financially weak Renault’s capital tied up in its 43.4 percent stake in Nissan. Renault’s market capitalization is currently $16 billion.
Nissan and the French government each own 15 percent of Renault.
Ghosn told Reuters in an interview last month that addressing the financial market’s unhappiness with the current capital structure was his biggest challenge, and said he hoped to come up with a solution within three years.
In his interview with the Nikkei, Ghosn repeated his stance that shareholders on both sides of the partnership must be taken into consideration, while ruling out an outright merger that he said always led to a loss of identity on one side.
Some analysts have suggested much closer ties, including a full merger, would reduce the inefficiency of running two separate companies, while others have recommended Renault cut its stake in Nissan. Renault only needs one-third of Nissan to retain a controlling stake.
The Nikkei said Ghosn’s plan calls for Russia’s leading automaker AvtoVAZ , held 25 percent by Renault, as well as Romania’s Dacia and South Korea’s Renault Samsung Motors — both subsidiaries of the French automaker — to move under the proposed umbrella.
Renault and Nissan have plans to take a combined stake of at least 50 percent in AvtoVAZ, with Nissan taking more than half of the remaining 25 percent, Ghosn told Reuters last month.
Placing leading local firms under the group’s umbrella would be advantageous in expanding local operations while reducing expenses for building factories and establishing sales networks, the Nikkei said.
Nissan sold a record 4.08 million vehicles worldwide in 2010, with Chinese sales hitting 1 million for the first time and surpassing figures for Japan and the United States. Russia, India and Brazil are also key markets for Nissan, the report said.

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