Renault gains more than 6% on the Paris Stock Exchange after the announcement of a possible merger between Nissan and Honda

The title of the French automobile group Renault jumped more than 6% at the opening of the Paris Stock Exchange on Wednesday, after the Japanese giant Honda indicated that it was exploring the possibility of a merger with its compatriot Nissan, of which Renault holds even more ‘a third of the capital. Around 2:15 p.m. GM, the stock climbed 6.70% to 47.48 euros.

Japanese automobile giant Honda announced on Wednesday that it was exploring the possibility of a merger with its struggling compatriot Nissan, a merger that could allow them to better compete with Tesla and their Chinese rivals in the electric sector. This merger could accelerate the unraveling of Nissan’s historic alliance with Renault, which has already been gradually reducing its presence in the Japanese group’s capital since last year. Renault still owns 17% of Nissan directly and 18.6% via a trust, for a total of more than 35%. “As announced in March and August, we are discussing possibilities for cooperation in many areas” and a merger “is among the possibilities”admitted a Honda spokesperson to AFP.

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The two groups “explore various possibilities for collaboration, to leverage their respective strengths”Nissan simply reacted. Already associated in a “strategic partnership”Honda and Nissan will begin talks to unite under a single holding company and sign “Soon” a memorandum of understanding, according to the daily Nikkei.

Nissan had opposed a merger with Renault, but a merger with Honda “could be considered more balanced and fair”explains Tatsuo Yoshida, analyst at Bloomberg Intelligence, to AFP. For Nissan, he adds, “a merger would provide short-term respite” facing strong financial pressure: the group announced at the beginning of November that it was going to cut 9,000 positions in its global workforce and cut its production capacities in the face of the plunge in its sales, particularly in China in the face of competition from local brands on the ‘electric.