French PM: 'No Renault-Nissan merger'

French Prime Minister Manuel Valls said the government did not want carmakers Renault and Nissan to merge.

At the moment the companies own large shareholdings in each other and co-operate closely.

However, on Friday Renault held an emergency board meeting amid reports the French government, one of its biggest shareholders, wanted a merger.

Mr Valls has denied that, saying he hopes the existing alliance, which dates back to 1999, would continue.

"The state is fully playing its role as a shareholder," the French prime minister said. "And at the same time, we fully trust Nissan and Renault managers."

French car manufacturer Renault owns 43% of Nissan, while the Japanese firm holds 15% of Renault.

French Prime Minister Manuel Valls does not want a Renault-Nissan merger

Last week Reuters reported that French economics minister Emmanuel Macron had been pressuring Carlos Ghosn, who serves as chief executive of both companies, to undertake a full merger.

Amid escalating tensions, Renault said on Friday it had started the "first stage in discussions between the two main long-term Renault shareholders, the French government and Nissan".

Nissan has expressed concern after the French government unexpectedly raised its stake in Renault to 19.7% and doubled its voting rights in April.

The move had "highlighted an imbalance in the Renault-Nissan alliance", Nissan chief competitive officer Hiroto Saikawa, a Renault director, said on Friday.

"Nissan would like to put this matter behind us as soon as possible so that we can re-establish the foundations of a successful alliance and focus on our real business," he added.