Renault Seen Biggest Beneficiary in Wake of Honda and Nissan Merger

Renault shares surged 6% following reports of potential strategic and financial benefits stemming from merger discussions between Honda and Nissan, Japan's second and third-largest automakers. Analysts view such a tie-up as having significant implications for Renault, which remains Nissan’s top shareholder. 

Renault owns 17% of Nissan directly and an additional 18.7% via a French trust, even after scaling back its long-standing alliance with the Japanese automaker last year. The report of merger talks made Renault shares the second-biggest gainer on the pan-European STOXX 600 index on Wednesday. 

While Renault has so far declined to comment on whether it might sell its Nissan shares, sources familiar with the situation told that the French automaker is open, in principle, to supporting Nissan’s pursuit of merger talks with Honda. 

Analysts believe this potential merger could bring multiple advantages for Renault. According to Jefferies, the merger talks boost Nissan’s stock, increasing liquidity and aligning with Renault’s ongoing strategy, initiated in late 2023, of reducing its stake in its Japanese partner. 

Additionally, analysts at Oddo suggest that the merger offers Renault a potential buyer for a significant portion of its remaining €3 billion ($3.15 billion) stake in Nissan. Based on current market values, Honda shareholders would hold approximately 85% of the merged company, with Nissan shareholders holding the rest. Renault, in turn, would retain slightly more than 5% of the new entity, reflecting its current ownership in Nissan. 

Oddo also noted potential synergies between Honda and Renault’s electric vehicle (EV) unit, Ampere, in Europe. Honda could emerge as a new client for Ampere, while Nissan is already a key partner. Nissan relies on Renault to manufacture its Micra for the European market and plans to use the platform of Renault's Twingo Electric for a future model. 

The merger discussions highlight growing pressures on automakers from competitors like Tesla and Chinese manufacturers, pushing firms toward deeper collaboration and strategic restructuring.