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Renault shares jump after Nissan merger report | Renault shares jump after Nissan merger report |
(about 4 hours later) | |
Shares in French car maker Renault have jumped 5.4% at the opening of trading after a report that it is in merger talks with Japanese car giant Nissan. | Shares in French car maker Renault have jumped 5.4% at the opening of trading after a report that it is in merger talks with Japanese car giant Nissan. |
Bloomberg reported that the companies are discussing becoming one entity with a single stock. | Bloomberg reported that the companies are discussing becoming one entity with a single stock. |
The companies have been in a strategic alliance since 1999. | The companies have been in a strategic alliance since 1999. |
Asked about the report, a spokesman for Renault-Nissan said: "We do not comment on rumours and speculation." | Asked about the report, a spokesman for Renault-Nissan said: "We do not comment on rumours and speculation." |
Earlier in March, Reuters reported that Renault and Nissan were discussing plans for the Japanese carmaker to buy most of the French state's 15% Renault holding. | Earlier in March, Reuters reported that Renault and Nissan were discussing plans for the Japanese carmaker to buy most of the French state's 15% Renault holding. |
The alliance between the firms includes sharing engines and building smaller vehicles on a common architecture. | The alliance between the firms includes sharing engines and building smaller vehicles on a common architecture. |
Japanese car firm Mitsubishi is also part of the alliance. | Japanese car firm Mitsubishi is also part of the alliance. |
In 2016, Renault, Nissan, and Mitsubishi had combined sales of 9.96 million - which was one in nine of all vehicles sold worldwide. | In 2016, Renault, Nissan, and Mitsubishi had combined sales of 9.96 million - which was one in nine of all vehicles sold worldwide. |
The alliance had the fourth largest number of sales in 2016 behind Volkswagen Group, Toyota, and General Motors. | The alliance had the fourth largest number of sales in 2016 behind Volkswagen Group, Toyota, and General Motors. |
Professor Christian Stadler of Warwick Business School said: "Markets tend to be enthusiastic about big mergers. Rarely, however, do these mergers live up to expectations." | |
On the plus side, "the two firms have a long established and successful alliance", he says. | |
But the downside is that it is hard to see how a merger could add much to what the firms could already do in an alliance, he said. |