Automotive giants Nissan and Renault are in talks to merge into a single company.
Nissan and Renault already form two sides of a three-way strategic partnership with Mitsubishi Motors, which sees all three companies share vast quantities of data and technology. However, their fragmented ownership structure sometimes made it difficult to co-develop platforms for the international market.
But merging the two largest players in the trifecta would streamline production and allow cross-badged cars and SUVs to be developed and sold internationally.
Renault currently owns 43% of Nissan while the Japanese carmaker owns 15% of the French automotive manufacturer. According to Bloomberg, the proposed deal would see Renault shareholders given stock in the new company.
Carlos Ghosn, the current chairman of the Nissan-Renault-Mitsubishi alliance, would head the merged entity.
A combined Nissan-Renault would be a formidable opponent for the likes of even greater automotive giants such as Volkswagen and Toyota, however, national governments may prove to be the biggest stumbling block in the proposed merger.
The government of France currently has a 15% stake in Renault and has been reluctant to relinquish its financial control. Ever since 1999, when the Nissan-Renault-Mitsubishi alliance first began, Nissan and Renault have flirted with the idea of merging but had always been shut down by the French government and their ownership stake in Renault.
Even if France agreed, there would be other problems the merger would have to surmount. Renault and Nissan are both highly revered in their respective countries, and a merged company would likely see fights over where the company is headquartered.
One solution would be to follow the example of Fiat Chrysler and simply set up shop in a neutral country, like the United States or Switzerland.
Talks have been ongoing for several months, and it seems just as likely as previous attempts that they will be nothing more than talks. According to Reuters, Nissan had been trying to purchase the French stake in Renault earlier this month but so far to no avail. It seems likely then that national politics will again prevent the two companies from merging in the near future.