Bloomberg: Honda wants to remove Renault from Nissan merger deal

In the pending merger between Honda and Nissan, intrigue is unfolding over French carmaker Renault. The latter holds a 35.7 per cent stake in Nissan. According to Bloomberg, Honda has asked Nissan to buy out this stake with an estimated value of 557 billion yen (US$3.6 billion).

Here's What We Know

Honda fears that the French automaker may sell its Nissan stake to a third-party buyer during merger talks. The deal, which promises to create one of the world's biggest automotive giants, could be derailed if control of Nissan falls into unpredictable hands.

Even before Honda and Nissan's talks were officially confirmed, there were rumours that Taiwanese company Foxconn was interested in a share of Nissan in the hands of Renault. This has added to the tension surrounding the deal.

What is Renault saying?

There is now an alliance between Renault Nissan and Mitsubishi. However, the official press release regarding the possible Honda-Nissan merger did not mention Renault at all. And a brief follow-up statement from the French company simply says it will "consider all options based on the best interests of the Group and its stakeholders."

What's next?

At this stage, Honda and Nissan are still determining whether a merger is even viable. That decision should be made by the end of January. If it happens, formal action to merge the companies will be taken by August 2026. Presumably, any potential action by Nissan to buy out Renault's stake won't happen until the end of January. And there are still doubts that Nissan can even afford to do so amid financial difficulties.

If a merger of the Japanese companies does take place, Honda and Nissan will remain separate brands with their own model lines, but will combine platforms and technology. Mitsubishi, another member of the Renault-Nissan-Mitsubishi alliance, has expressed interest in joining the future conglomerate, but no official decision has been made yet.

Source: Bloomberg