Ongoing discussions between Nissan and Honda envisage the creation of a holding company, possibly with the integration of Mitsubishi Motors, of which Nissan owns 24%. With a combined capitalization of almost $54 billion, such an entity would be on a par with behemoths like Stellantis, formed by the merger of Fiat Chrysler and PSA.
This merger is intended to boost competitiveness against Toyota and to catch up in the fields of electric vehicles (EVs), artificial intelligence and software. However, analysts such as Seiji Sugiura, of Tokai Tokyo Intelligence Laboratory, note that the cultural and technological integration between Honda and Nissan could be an obstacle, especially in a sector undergoing rapid change. There are rumours that discussions between Nissan and Honda may have accelerated after the Taiwanese company Foxconn (Hon Hai Precision) expressed an interest in Nissan.
The impact on Renault
According to Jefferies analyst Philippe Houchois, this potential merger between Honda and Nissan would be largely positive for Renault. He identifies several benefits for the French automaker.
Firstly, the revaluation of Renault's assets, since the rise in Nissan's share price, combined with a possible sale of Renault's available-for-sale shares in the Japanese manufacturer (18.7% of the capital), could generate 1.33 billion euros. This divestment would strengthen Renault's liquidity and give it greater financial flexibility.
Secondly, the strategic holding in the new entity, should the stake not be sold. In the event of a merger, Renault's stake in the new group (Honda-Nissan-Mitsubishi) would be reduced to around 5.8%. However, this would enable Renault to retain strategic influence while alleviating the financial constraints associated with too large a shareholding.
Finally, industrial cooperation could continue. Despite a reduction in its shareholding, Renault could continue to collaborate with Nissan, notably through subcontracting and joint projects on EV technologies and software. This cooperation would be particularly valuable at a time when Honda has ceased production in Europe.
Nevertheless, the scenario is not without risks. Renault could find itself in a minority position with no leverage in the new entity, limiting its ability to influence strategic decisions.
An opportunity to redefine the Renault-Nissan Alliance?
This situation could also be an opportunity for Renault to rethink the Alliance, which has been under pressure for several years. As Philippe Houchois points out, a possible share swap or reconfiguration of cross-shareholdings could enable Renault to strengthen its financial structure, while refocusing its efforts on strategic markets such as Europe and Latin America.
