Karachi: Two big automobile manufacturers, Renault and Nissan are now looking for a merger. Both key players in the automobile industry have the intention of working together and to form a single public limited company. However, the merger will significantly help both companies to find a common ground to effectively compete with their key competitors like Volkswagen and Toyota.
Impact of Nissan-Renault Merger
The success of full merger will significantly help both companies to emphasize on the production of autonomous vehicles, electric vehicles, and car sharing services. Business and financial analysts are also seeing it as a positive step for the financial market. The merger would enforce Nissan to offer stock to the Renault’s Shareholders in the merged company. In addition, Nissan’s shareholders would also gain shares in the new company. According to sources, Carlos Ghosn will lead the newly merged company.
Some critics believe considering the merger as a bad move as both these companies are from different countries. The French government is also a stakeholder in Renault with 15% shares. However, it might be difficult for both the Japanese and French governments to withdraw from their respective shares in these companies. Currently, Nissan owns 15% shares of Renault, and Renault holds 43% shares of Nissan. According to sources, Carlos is looking to buy the majority of French government’s shares in Renault.