Renault & Nissan Joint Venture
Since the 1980s, and even more now in the late nineties, it has become a growing trend for companies, both large and small, domestic and foreign, to form strategic alliances within their particular industries. There are many specific goals that companies may be looking to achieve by dong this, but the main underlying reason is to guarantee the long-term sustained achievement of “fast profitable growth” for their business. They have to keep up with a rapidly increasing diversified global market and increased competition.
Renault and Nissan join forces to achieve profitable growth for both companies? On Saturday, March 27th, it was announced that Renault, a French car manufacturer, would be teaming up with Nissan Motor Corporation in a $5.4 billion deal that created the worlds fourth largest automaker. This deal gives Renault a 36.8% stake in Nissan, a company that has been struggling financially for the past few years. “The $5.4 billion deal between Renault and Nissan hands over effective control to the French automaker in exchange for badly needed cash” (Wwodruf). There are other agreements within the contract, but they will not be discussed in much detail at this time. Both of these corporations plan on benefiting from the merger.
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