Honda Seeks to Exclude Renault from Nissan Merger

According to a recent report, Honda has expressed concerns about Renault"s potential influence on its planned merger with Nissan. Honda has reportedly asked Nissan about possibly purchasing Renault"s stake in the company.

Renault currently owns a 35.7% stake in Nissan, valued at approximately $3.6 billion. With Renault absent from the discussions between Honda and Nissan, the French company stated that it "will consider all options in the best interest of the group and its shareholders," placing Honda in a complicated position.

As reported by Bloomberg, Honda has requested Nissan to allow it to acquire Renault"s stake, fearing that a third party"s acquisition of Renault"s shares could lead to unwanted foreign influence on Nissan during the negotiations.

However, completing a deal for Nissan to buy Renault"s stake could be a significant challenge. Nissan currently holds cash reserves of approximately ¥1.52 trillion (equivalent to $9.8 billion) as of the end of 2024. Acquiring Renault"s stake would require more than one-third of this amount. Given Nissan"s current financial struggles, it remains unclear whether the company can justify such expenses unless it experiences a significant financial recovery.

The Japanese government is reportedly keen on encouraging a merger between Nissan, Honda, and Mitsubishi to ensure these brands remain under Japanese ownership. The potential threat posed by Taiwan"s Foxconn, which has expressed interest in acquiring Nissan, may have prompted Japan"s Ministry of Economy, Trade, and Industry to push Honda toward the merger.

However, Nissan still faces numerous challenges before the deal can be finalized. According to a recent report, Nissan may need to triple its profits by the fiscal year 2026 to prove to Honda that it can be a strong partner. If Nissan fails to achieve this, the merger may not proceed.