Nissan and Renault have been linked in an alliance for nearly two decades, with each carmaker owning shares of the other. The architect of this intricate Franco-Japanese arrangement was Carlos Ghosn, the CEO of Renault and chairman of Nissan—but his future at both companies is in doubt following his arrest for financial misconduct in Tokyo on Monday (Nov. 19)
It now appears Ghosn had more than just an alliance in mind. According to the Financial Times (paywall), Ghosn was planning to merge Renault and Nissan into one company, in a move that would have cemented Nissan’s junior status within the alliance. Nissan’s board, which plans to remove Ghosn as chairman this week, was strongly opposed to his plan.
Because of its approximately 40% ownership stake in Nissan, Renault has a governance role and can make executive changes. Nissan, which owns just 15% of Renault, had no such control over its counterpart.
“The board always said they would fight very hard against any reorganization that entrenched that second-tier status,” one person close to the board told the FT.
Reports of the planned merger adds a heavy dose of intrigue to Ghosn’s arrest. Nissan CEO Hiroto Saikawa—Ghosn’s one-time lieutenant—has said the investigation into Ghosn, which allegedly found he under-reported his income and misused corporate funds, was triggered by a whistleblower in the company. But the disclosure of Ghosn’s pursuit of a contentious deal certainly puts Nissan’s possible motives into focus.