Renault SA and Nissan Motor Co. are in talks to merge and create a new automaker that acts as a single trade, people with knowledge of the matter said.
An agreement would end the current link between the company and marry it as a society, said the people who were asked not to be identified as the details are not public. Renault currently owns 43 percent of Nissan, while the Japanese automaker holds 1
The parties are discussing a transaction in which Nissan would essentially give Renault shareholders in the new company, the people said. Nissan shareholders would also receive shares in the new company in exchange for their stakes, they said. The automaker can retain headquarters both in Japan and in France.
Renault Shares jumped as much as 8.3 percent in early trading Thursday, hitting the highest intraday level in over a decade. In Paris, they increased by 4:05 clock by 4.2 percent, which brought the company a market value of around 29 billion euros. Nissan shares fell nearly 2 percent last year, giving the company a valuation of 4.6 trillion yen ($ 43 billion)
Achieving an agreement could prove very difficult, people said. The French government owns 15 percent of Renault and may be reluctant to give up control over its stake or water down its position. Both the French and Japanese governments would have to pass a deal and have strong views on where the joint venture is based, people say.
One possibility would be to start the business in London or the Netherlands. Atlantic automaker Fiat Chrysler Automobiles NV has its corporate charter. Fiat Chrysler has its headquarters both in Italy and in the US
No final decisions have been made and the talks, which have been going on for several months, could not lead to a deal, they said.
A spokesman for the Renault-Nissan Alliance said that the group was not commenting on rumors and speculation, while a spokesman for the French Ministry of Finance declined to comment. Also representatives of Yokohama, Nissan and Renault with seat in Japan did not want to comment on it.
Reuters earlier this month reported that Nissan was discussing the purchase of much of the French government's stake in Renault, citing unidentified individuals. At that time, the alliance between Renault and Nissan said that any discussion of equity transactions between the parties was "pure speculation."
Ghosn has agreed to consolidate Renault's partnership with Nissan and declare in February that the companies will work out a plan "to make Allianz irreversible". The 64-year-old resigned as Chief Executive Officer at Nissan last year to focus on the partnership.
Companies are seeking to double synergies to  ($ 12.2 billion) by 2022 by 2016. In April, Mitsubishi Motors Corp. – where Nissan is the largest shareholder – continues to integrate into the Alliance by joining a joint parts purchasing organization.
Allianz forecasts sales of 14 million units by 2022 compared to 10.6 million last year. Volkswagen AG, the largest car manufacturer in the world, sold 10.7 million vehicles last year.
While companies took a variety of benefits from their partnership, their stamina could be complicated until corporate imbalances are resolved] Ghosn reiterated last month that Japan would not agree to a closer structure if France shareholder remains. He also said he was not trying to convince the French state to reduce its stake in Renault.
"They decide to be here or get out," he said. "Honestly, I do not even open this topic, I just think that I have the shareholders I have, and I try to satisfy them in the best possible way and to make sure they understand our strategy and appreciate our results as much as possible.
– With the support of Craig Trudell, Jie Ma and Ania Nussbaum