Car Makers Rule Out A Merger

   (FROM THE WALL STREET JOURNAL 12/16/15) 
   By Eric Pfanner

YOKOHAMA, Japan -- Renault SA and Nissan Motor Co. will step up joint efforts without a merger after settling a dispute with the French government over the balance of power in their partnership, alliance chief Carlos Ghosn said on Tuesday.

Mr. Ghosn, who also serves as chief executive of the French and Japanese car makers, said a merger might "one day make a lot of sense, but certainly not today."

"I don't think we're ready," he said at Nissan headquarters. "Yeah, I know the markets want a merger. It's not only about the market; it's about the sustainability of what we're doing."

Shares of both companies have fallen since Friday when the companies announced the resolution of a tense standoff with the French government under which they revised the terms of an agreement governing the Renault-Nissan Alliance. The declines highlight investor concerns that the revision doesn't go far enough to address shifts in the relative strength of Renault and Nissan since they joined forces in 1999.

Under the compromise, Nissan was given the right to increase its stake in Renault -- currently a 15% nonvoting interest -- if the Japanese partner decides that the French government, a Renault shareholder, intervenes too much in its affairs. The dispute arose when Paris increased its stake in Renault, which owns a 43% voting interest in Nissan, to ensure enforcement of a new French law that grants double voting rights to long-term shareholders.

Instead of moving toward a merger, Renault and Nissan will unveil new operational synergies next year, Mr. Ghosn said.

(END) Dow Jones Newswires

December 16, 2015 02:47 ET (07:47 GMT)

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