Foxconn Negotiating with Major Shareholder Renault to Acquire Nissan Stake

Taiwan's Hon Hai Precision Industry, the parent company of Foxconn, the iPhone contract manufacturer, is reportedly negotiating the sale of Nissan shares with Renault, Nissan's largest shareholder, according to Taiwan's Central News Agency and Bloomberg News on the 19th.

According to Taiwan's Central News Agency, Hon Hai had previously expressed its intention to acquire shares in Nissan, but Nissan did not agree. Subsequently, Hon Hai turned to Renault, the major shareholder holding 36% of Nissan's shares. Jun Seki, Foxconn's Chief Strategy Officer (CSO) in the electric vehicle sector and a former Nissan executive, is currently negotiating with Renault in France.

Nissan logo. Photo by Reuters and Yonhap News

The previous day, Nihon Keizai Shimbun (Nikkei) reported that Honda and Nissan, the second and third largest automakers in Japan, are in talks for a business integration. The two companies are considering establishing a holding company under which both would operate.

However, Hon Hai Precision Industry has emerged as a variable in the integration of the two companies. Foxconn declared its entry into the electric vehicle business to diversify its revenue streams and plans to produce 3 million units annually by 2027. To this end, it recruited Jun Seki, the former Nissan executive and current CSO. Nikkei believes Foxconn intends to invest in Nissan to acquire electric vehicle manufacturing know-how and a global network.

According to Nikkei, Honda warned that if Nissan cooperates with Foxconn, it would nullify the strategic partnership with Nissan. Honda and Nissan are expected to begin merger negotiations as early as the 23rd of this month.

Bloomberg, citing sources, reported that Renault is open to the possibility of promoting merger talks between Nissan and Honda. While Renault hopes Nissan will overcome its management crisis, it has no intention of directly injecting capital, so it is open to any negotiations that would strengthen Nissan. It also stated that all proposals regarding Nissan will be carefully evaluated to protect Renault's interests.

Earlier this year, Jean-Dominique Senard, chairman of Renault, stated that he would welcome a new partnership that could make Renault and Nissan stronger. Bloomberg explained that even if Renault sells its Nissan shares, it could profit from a rise in stock prices.