French Renault SA and Japanese automaker Nissan Motor Corporation are negotiating a merger. The message is no different, because there were rumors about such negotiations several years ago. Then we never got official information. There is no it now.
Nevertheless, authoritative publications such as Bloomberg or, for example, The New York Times are already talking about the merger. This, of course, is not the absolute truth, but sources confirm such negotiations, which means that everything is possible.
If the merger takes place, what does it mean?
Naturally, the first thing that happens is the consolidation of the companies' shares. What place they will take on world exchanges, what total weight and value they will receive - for now, one can only guess. But it is worth noting that French shares are looking pretty good on the market now, showing a stable, albeit insignificant, growth. The Japanese are also far from critical. A 15-year-old alliance with Renault saved the brand from serious problems, and amid rumors of a merger, the stock price tag began to climb altogether.
It should also be understood that Renault owns more than 43% of Nissan. This is at a time when the Japanese received only 15% of Renault during the organization of the alliance. And then, as they say, on the goodwill of the French, who invested at that time in rather controversial assets. By the way, Renault has a similar situation with our AvtoVAZ. But that is a completely different story with different initial data.
However, here is also the cornerstone that makes it difficult to soberly assess the chances of a merger. The fact is that, at first glance, Renault has everything in perfect order: over the year, the brand's value grew by 15%, capitalization increased to $ 35.4 billion, and its profit amounted to $ 72.4 billion. At Nissan it seems to be the other way around: the price of the company has decreased by 2%, capitalization has decreased.
But even so, the Japanese capitalization is $ 43 billion, and the profit in 2017 was $ 107 billion. That is, disputes and negotiations about the shares of companies in each other can take a very, very long time. Moreover, the governments of France and Japan hold shares in both Renault and Nissan. The state's share in Renault is approximately 15% (controlling stake), while Nissan is state-owned by 21%. That is, the governments of the two countries must agree on the merger, its size, conditions and other points, of which there are hundreds in such cases. The government's share in Renault could have been reduced to zero altogether. There was talk about this several years ago. But François Hollande flatly refused to leave Renault. Perhaps Mr. Macron has a different view of such things.
The devils laugh at what you plan for tomorrow
Japanese proverb
Why is this needed?
Of course, everyone who in the automotive world distinguishes the hood from the trunk understands why this is done. Of course, in contrast to the Volkswagen Group and partly - Toyota Motor. Globalization, in its purest form imaginable, is akin to the highest quality cut diamond.
In 2017, the alliance of Renault, Nissan and Mitsubishi (yes, Mitsu is also here) sold more than 10.6 million vehicles, becoming the largest seller in the world. These guys plan to sell about 14 million cars annually by 2022. Volkswagen Group, by comparison, sells 10.5 million cars a year, while Toyota sells 10.4 million.
It is also worth noting that the French have rather weak positions in the leading world markets, where Nissan's "client base" can become a pass. The ten largest car markets now look like this: China (24.2 million cars per year), USA (17.5 million cars), Germany (3.4 million), India, Japan, Great Britain, Brazil, France, Canada, Italy (1 , 9 million). That is, Renault needs the Asian market like air in order to “nail down” the ambitions of its German and Japanese colleagues.
It is worth noting the role of Mitsubishi (since we remembered) in the merger. Nissan owns 34% of Mitsu shares, which also raises many questions about brand ownership. Will Renault buy back the shares or will it simply become the assignee of Nissan's assets? This is also a big question. Here we can already talk about a banal takeover.
Who will steer?
This point is also beyond doubt. Now the chairman of the board of directors in three companies of the alliance is the representative of Renault Carlos Ghosn. With a probability of 99.99%, he will also head the single company.
Experts consider his sole management of the company to be the main unpleasant moment. Yes, he develops the company at a good pace, works skillfully with competitors. In fact, he created a huge empire, which, besides him, few people can manage. And Carlos, by the way, is already 64 years old.
Carlos Ghosn created a monster that listens to one of his hand movements. But the structure is so complex that if Gon is replaced, the monster can die.
James Womack, founder of the Entrepreneurship Institute in Cambridge, Massachusetts
What are the potential opportunities
The fact is that Renault-Nissan is already the world's largest seller of cars powered by electric batteries. The popular, hyped Tesla is quietly swallowing dust on the curb in comparison with the sales of the Franco-Japanese alliance. Yes, the Chinese have already become leaders in certain models. But their main market is domestic. Many manufacturers try to think in the direction of eco-technologies, and the experience of the Japanese and French allows them to act concretely and purposefully.
That is, a clear alliance policy is outlined in relation to alternative technologies on the market in the coming years. Until 2022, Renault alone plans to bring eight new electric cars and 12 hybrids to the roads. In modern realities, this is a strong blow to competitors.
What's the bottom line?
Should we look forward to one of the largest mergers in the history of the automotive industry? Let's just say: there are definitely prerequisites. According to unconfirmed reports, Renault has already reduced its percentage of Nissan shares to 19%, which indicates the desire of the French to align themselves in assets for more favorable ground before making a final decision.
For a merger that will be beneficial to both parties (and the Japanese will not agree to anything else), it is required to equalize the influence and opportunities of the parties as much as possible. And in this direction steps are undoubtedly being made. Where they will lead, only Gon, apparently, knows.
K: Companies founded in 1999
Activities
In China
In June 2003, the Dongfeng Motor Company joint venture was established between the Chinese company Dongfeng and the Japanese company Nissan. The factory is located in Wuhan city, China. The vehicle list includes: Nissan Sunny, Nissan Bluebird, Nissan Teana and Nissan Tiida. Production of a number of vehicles on the D car platform is planned by 2014.
Daimler and Alliance
On April 7, 2010, in order to improve quality and exchange modern technologies, as well as reduce joint costs, the German company Daimler entered into a strategic agreement with the Alliance. As a first step, Daimler will acquire 3.1% of Renault and Nissan, while Renault and Nissan will each have 1.55% (each) of Daimler. Through joint procurement and the use of a large number of standard auto parts and modern technologies, companies will significantly reduce their costs. In this case, the joint parts and technologies are aimed at mini car models: Daimler Smart and Renault Twingo
IN THE USA
In January 2012, the companies announced that they would jointly begin producing engines at Nissan's Tennessee plant for Mercedes-Benz.
In India
In 2010, the alliance opened a plant in India in the city of Chennai to manufacture the Nissan Micra. The capacity of the new enterprise is 400,000 vehicles per year. In 2012, the number of employees of the Indian plant is 6000, including 457 managers, 810 quality controllers, 4831 working operators, the average age of workers in production is 24 years.
In Brazil
In early October 2011, the head of the alliance, Carlos Ghosn, met with the President of Brazil, Ms. Dilma Rousseff, and announced that the alliance intends to increase its production in Brazil by 2016. In particular, the production of the existing Renault plant in Curitiba will be expanded and a new Nissan plant with a planned productive research center will be built.
In Russia
In June 2012, the Renault Nissan Alliance began a test assembly of Nissan Almera Classic and Nissan Bluebird Sylphy cars at the AVTOVAZ plant in the city of Togliatti. In 2013, mass production and sale of cars began.
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Excerpt from Renault Nissan (Alliance)
During my "walks" I met many different, beautiful newcomers who came to visit the Holy Pope. They were cardinals, and some unknown to me, very high-ranking persons (which I judged by their clothes and by how proudly and independently they behaved with the others). But after leaving the Pope's chambers, all these people no longer looked as confident and independent as they had before visiting the reception ... After all, for Karaffa, as I said, it did not matter who the person standing in front of him was, the only important for the Pope HIS WILL was. The rest did not matter. Therefore, I very often had to see very "shabby" visitors, bustlingly trying to leave the "biting" Papal chambers as soon as possible ...On one of the same, completely identical "gloomy" days, I suddenly decided to do something that had been haunting me for a long time - to finally visit the ominous Papal cellar ... I knew that this was probably "fraught with consequences", but the expectation of danger was a hundred times worse than the danger itself.
And I decided ...
Going down the narrow stone steps and opening the heavy, sadly familiar door, I found myself in a long, damp corridor, which smelled of mold and death ... There was no lighting, but it was not difficult to move further, since I was always well oriented In the dark. Many small, very heavy doors sadly alternated one after another, completely lost in the depths of the gloomy corridor ... I remembered these gray walls, I remembered the horror and pain that accompanied me every time I had to return from there ... But I ordered myself to be strong and not think about the past. She ordered me to just go.
Finally, the creepy corridor is over ... Having carefully peered into the darkness, at the very end of it I immediately recognized the narrow iron door, behind which my innocent husband once died so brutally ... my poor Girolamo. And behind which were usually heard creepy human moans and screams ... But on that day, for some reason, the usual sounds were not heard. Moreover, behind all the doors there was a strange dead silence ... I almost thought - finally Karaffa came to his senses! But then she pulled herself up - Dad was not one of those who calmed down or suddenly became kinder. Simply, having brutally tortured at the beginning to find out what he wanted, later he apparently completely forgot about his victims, leaving them (like waste material!) At the "mercy" of the torturers who tortured them ...
Carefully approaching one of the doors, I gently pressed the handle - the door did not budge. Then I began to feel it blindly, hoping to find the usual bolt. The hand came across a huge key. Turning it, the heavy door creaked inside ... Carefully entering the torture room, I felt the extinguished torch. To my great regret, there was no fire.
- Look a little to the left ... - suddenly a weak, exhausted voice rang out.
I shuddered with surprise - someone was in the room! .. Having fumbled with my hand on the left wall, I finally felt what I was looking for ... In the light of a lighted torch, big, wide-open, cornflower-blue eyes shone right in front of me ... an exhausted man, chained by wide iron chains, sat against the cold stone wall ... Not being able to take a good look at his faces, I brought the fire closer and recoiled in surprise - on the dirty straw, all smeared with my own blood, sat ... the cardinal! And from his rank, I immediately understood - he was one of the most senior, the closest to the Holy Pope. What prompted the “holy father” to act so cruelly with his possible successor?! .. Did Karaffa really treat “his own” with the same cruelty? ..
- Are you very bad, Your Eminence? How can I help you? ”I asked, looking around in confusion.
I was looking for at least a sip of water to drink the unfortunate man, but there was no water anywhere.
- Look in the wall ... There is a door ... They keep wine there for themselves ... - as if guessing my thoughts, the man quietly whispered.
I found the indicated cabinet - there really was a bottle that smelled of mold and cheap, sour wine. The man did not move, I gently lifted his chin, trying to get him drunk. The stranger was still quite young, forty or forty-five years old. And very unusual. He resembled a sad angel tortured by beasts who called themselves "humans" ... The face was very thin and thin, but very regular and pleasant. And on this strange face, like two stars, bright cornflower-blue eyes were burning with inner strength ... For some reason he seemed familiar to me, only I could not remember where and when I could meet him.
The stranger groaned softly.
- Who are you, Monsignor? How can I help you? I asked again.
"My name is Giovanni ... you don't need to know more, Madonna ..." the man said hoarsely. - Who are you? How did you get here?
- Oh, this is a very long and sad story ... - I smiled. - My name is Isidora, and you don't need to know more, Monsignor ...
- Do you know how you can get out of here, Isidora? - the cardinal smiled back. “You somehow ended up here?
- Unfortunately, it is not easy to leave here - I answered sadly - My husband could not, in any case ... And my father only reached the fire.
Giovanni looked at me very sadly and nodded, showing that he understood everything. I tried to give him the wine I found, but nothing worked - he was unable to take even the slightest sip. Having "looked" at him in my own way, I realized that the poor fellow had badly damaged chest.
- MMCwill receive strategic, operational and management assistance fromNissan
- The main goal of the alliance is to achieveMMC growth of profitability
- Carlos Ghosn, President and CEO of Renault and Nissan named as Chairman of the Board MMC
- The company approved a new position - Director of Global Risk Control
Tokyo, 20 october 2016 - Mitsubishi Motors Corporation (MMC) announced that Nissan Motor Co., Ltd. (Nissan) completes the purchase of 34% of MMC shares for 237 billion Japanese yen and becomes the largest shareholder of MMC.
With Nissan's investment, MMC will become an equal partner in the 17-year successful Nissan-Renault alliance, which will open up new opportunities for MMC to interact to improve profitability and profitability.
Carlos Ghosn, President and CEO of Nissan, has been named Chairman of the Board of Directors of MMC. Mr. Carlos Ghosn will be joined by three more directors proposed by Nissan: Mr. Mitsuhiko Yamashita, former Executive Vice President of Development and Research, Nissan, Mr. Hitoshi Kawaguchi, Director of Balanced Strategy and Mr. Hiroshi Karube, who is responsible for global and global asset management.
MMC President and Chief Executive Officer, Mr. Osamu Masuko, to strengthen the company's position, made a request to include a Nissan leader on the MMC Executive Committee. Trevor Mann, currently Chief Executive Officer at Nissan, will become Chief Operating Officer at MMC.
“I applaud Nissan's commitment to providing strategic, operational and leadership support as our new and key shareholder,” said Mr. Masuko. “As part of the board of directors and management team, Nissan will help us rebuild our customers' trust and strengthen mutual assistance through the alliance we have created.”
MMC will establish a new position - Director of Global Risk Control, who will report directly to the Chief Executive Officer of the company. He will be responsible for compliance issues and monitoring emerging risks. The Director of Global Risk Management will regularly report to the board of directors on the measures taken to improve governance at MMC.
MMC's three largest investors - Mitsubishi Heavy Industries, Mitsubishi Corporation and The Bank of Tokyo-Mitsubishi UFJ - welcome Nissan's investment and pledged support for candidates to the new board of directors of the alliance. Over time, the three largest shareholders, together with Nissan, will own more than 51% of the share capital.
Building on 5 years of experience in small cars, Nissan and MMC will work together on a wide range of joint programs.
The companies have identified several areas in which they will work within the alliance:
The partnership promises to create significant assistance for MMC, equivalent to 1% growth in operating profit margins in 2017, 2% in FY 2018, and over 2% in FY19. The projected effect of increased earnings per share for MMS is ¥ 12 in fiscal 2017 and ¥ 20 in fiscal 2018.
Ghosn said: “The created alliance will become one of the largest automotive alliances in the world, with annual sales of 10 million vehicles in FY16. In addition, Mitsubishi Motors will build on the entrepreneurial and collaborative spirit that has characterized our 17-year alliance with Renault. I am confident that this alliance will benefit all stakeholders. ”
In 2016, the Renault-Nissan alliance, which gained control of Mitsubishi Motors in October, sold 9.96 million vehicles, up 17% from the previous year. Nissan bought Mitsubishi Motors for $ 2.3 billion in October 2016 after a Mitsubishi fuel efficiency fraud scandal that crashed the company's market capitalization. Last year, the alliance fell slightly short of the top three car makers - Volkswagen (10.31 million), Toyota Motor (10.18 million) and General Motors (GM; 10.01 million). In 2011–2015 Renault-Nissan sold 8–8.5 million vehicles a year.
Until 2008, GM was the leader in the global market for over 70 years. Toyota overtook it in the crisis year and held the lead until 2016, only in 2011 losing the first place to GM due to problems with car production after the earthquake and tsunami in Japan. In 2016, Volkswagen, despite the diesel emissions scandal that rocked it in late 2015, overtook Toyota to become the world's largest automaker.
GM is in the process of exiting several markets it considers too disadvantageous for itself, such as Europe and India. Toyota has stated several times that sales leadership is not a goal for the company, but most importantly, harmonious sales growth and profitability.
The Franco-Japanese concern has become one of the few global players to surpass the industry-wide average growth rate of 5.5% since the beginning of the decade. In 2016, more than 87.6 million passenger cars were sold in the world, of which the four largest automakers accounted for 46.1%, the WSJ cited data.
Renault on Friday reported a record operating profit of 1.8 billion euros for the first half of 2017, with revenue growing 17% year-on-year to 29.5 billion euros. Carlos Ghosn said Renault's results created a "solid foundation" for the next strategic plan, which will be presented in October.
In the Russian market, where the company previously suffered significant losses, the profit for the half-year amounted to 3 million euros. The Russian auto market has been hit hard by the economic crisis, but Renault has now revised its sales forecasts to more than 5% growth. “The market, which we did not consider strong, recovered significantly,” - CFO Clotilde Delbeaux told analysts. Earlier this week, another French automaker, Peugeot, increased its forecasts for the Russian market.
But Renault's sluggish profitability disappointed analysts, with the company's shares falling 7.2% on Friday, the lowest level since June 2016. Despite a 10% jump in sales, operating margin increased only 0.1 pp to 6.2%, and in the automotive division only up to 4.8% (by 0.1 pp). Renault's result led to unpleasant comparisons to its national rival PSA Group, which posted a 7.3% margin on relatively stable sales.
The effective share of the Renault-Nissan alliance in the capital of AVTOVAZ exceeded 50%, while the share of Rostec dropped to 24.5%, the Vedomosti newspaper reports. The alliance obtained control over AVTOVAZ due to the concentration in its hands of 67.13% of shares in the Dutch company Alliance Rostec Auto BV, which owns 81.447% of ordinary and 47% of preferred shares of the Volga car plant. The share of "Rostec" in the capital of Alliance Rostec Auto decreased by 32.87%.
The deal was completed on June 18, Renault-Nissan President Carlos Ghosn told Vedomosti. According to him, the completion of the deal will not change the strategy of the enterprise - it will continue to be a platform for the production of both Lada cars and the alliance brands.
Earlier, Rostec CEO Sergei Chemezov spoke about the possibility of liquidating Alliance Rostec Auto BV and transferring to direct ownership of AVTOVAZ shares.
"The Dutch offshore has actually been liquidated, this company does not manage financial flows. It was created exclusively for administrative management. Since the Dutch offshore practically does not exist, we will re-register here in Russia," Chemezov said in May 2014.
At yesterday's meeting of shareholders of AVTOVAZ and the first meeting of the updated board of directors, the liquidation of the joint venture was not discussed. The representative of "Rostec" specified that the joint venture will exist until 2016.
According to Ghosn, the main task of the president of AVTOVAZ, Bo Andersson, will be the growth of sales and market share of Lada cars and the retention of the brand's leadership in the Russian automotive market.
The day before he announced that the production of LADA Priora cars will continue until 2018, so a number of improvements will be made to the model.
"LADA Priora has its own consumers who respect this car and are not going to give it up. For them we are preparing a program for updating the car, which has been codenamed Long Life. Now we are compiling a complete list of changes and specifying production volumes for the next four years." , - said Nikolay Fofanov, director of the LADA Priora project.
AVTOVAZ plans to rework the Priora bumper and lighting equipment, the steering wheel will receive electric heating, and new upholstery materials will be used in the cabin. The handling of LADA Priora will reach a higher level, thanks to the suspension settings similar to the Granta liftback in the luxury version. Gas struts, negative rear camber, new stabilizers and other equipment will be installed. In addition, the LADA Priora will have a vacuum amplifier of increased dimension and new pads, modified to eliminate squeak.
Earlier it was reported that at the end of 2015. AVTOVAZ will start serial production of Lada Vesta sedans, which will replace the Lada Priora family. The choice of the name at AVTOVAZ is explained by the fact that the Slavic name Vesta is associated with home, comfort, spring and the renewal of nature.
French automotive group Renault at the end of 2013 recorded a net loss of 34 million euros from participation in the JSC. A year earlier, participation in the capital of AVTOVAZ brought Renault a profit of 186 million euros.
