Renault RENA.PA shares rose sharply on Thursday, with traders attributing the gain to a Bloomberg News report that Renault SA and Nissan 7201.T are in talks to merge and create a new automaker that trades as a single stock.
Renault now owns 43 percent of Nissan while the Japanese automaker has a 15 percent stake in its French counterpart. Both companies are managed by Carlos Ghosn.
A possibility would be basing the new business in the Netherlands or London, where cross Atlantic automaker Fiat Chrysler has the company's corporate charter, but has its headquarters in both the USA and Italy.
Getting a deal done could prove very hard, the people said.
One possibility would be to base the company in London or the Netherlands, where cross-Atlantic carmaker Fiat Chrysler Automobiles (FCAU) has its corporate charter. The automaker might maintain its headquarter in France as well as Japan. A French finance ministry spokesman also declined to comment.
Shares in Renault were up 6.4% in afternoon trading. Nissan shares had earlier closed 0.5 percent lower in Tokyo.
Announced late past year by Ghosn, each of the brands will produce their future models using shared platforms and technology, as part of the Alliance 2022 plan, which will see cost savings from synergies double to €10bn (£8.7bn).
Renault holds 43.4 percent of Nissan but agreed to limit formal control of its larger partner in a 2015 shareholder pact that defused a boardroom standoff with the French government. "Our total annual sales are forecast to exceed 14m units, generating revenues expected at $240bn (£170bn) by the end of the plan".
Renault is Europe's third-largest auto maker after Volkswagen and PSA, having sold 1.6m cars previous year.
While the companies have claimed a multitude of benefits from their partnership, its staying power could be complicated until imbalances in the companies' ownership structures are resolved. He also said he isn't trying to convince the French state to reduce its stake in Renault. "Frankly, I don't even open this subject".
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