Paper Topic:

Renault/Nissan Merger Case Study

Running head : RENAULT /NSSAN MERGER

RENAULT /NISSAN MERGER

In APA Style (name (university

2005

Renault /Nissan Merger

I . Introduction

Mergers and Acquisition are famous for their deceiving benefits . It often poses as a great decision according to financial and other `on- ' considerations , but then proven to be a joke after being applied in practice . Research stated that over than 57 from 300 merged companies studied in a 10 year -period came back to their shareholders lagged behind the average of their industries (Mergers , n .d

The fact stated

above bring significant interest in the study of companies who succeed in conducting their mergers and acquisitions undertakings . The merger between Renault and Nissan is one of the largest and the most successful mergers conducted in the 20th century It is a join considered to be very profitable , despite the significant culture barriers , and the fact that one of which had a relatively weak international presence and the other was running on debt (Company Report , 2003

This study , however , will only discussed a little of how the merger shocked the world of business . We will focus on defining the problem present within the process of merger and present a suggestion for the solution of the problem . But for a sufficient understanding of the problem , anshort introduction of the merger process in required

I .1 Renault /Nissan Merger

After acquiring 36 of Nissan 's ownership , Renault sends Carlos Ghosn a 45 year-old Brazilian-French as Nissan 's new Chief Operating Officer Since then , the recently chosen CEO of both Nissan and Renault has become the most frequently interviewed and the most often quoted businessman in Japan (Nezu , 2000

To allow two companies with similar size , but contrasted culture to pursue the same ideals , the merger was conducted under three goals adopted as principles , which are

To share resources in relation with economics of scale considerations

To leverage the complementary strengths regarding products , technology and to increase efficiency

To preserve separate brand identities in to maintain strong band image and its wide customer base (Eppert , 2003

The steps publicized by the new management are

Reinforce the mutual Interest of both Partners

This merger is designed that each company profits from the performance of the other

Increasing the strength of Renault /Nissan 's strategic management by building the Renault-Nissan BV

Renault-Nissan BV is a strategic command structure in charge of coordinating Renault-Nissan 's operations worldwide

Keeping separate identities and independence of the two groups

Each companies responsible for its own operations and thus have the freedom to maintain their management style (Evans , 2002

I .2 . Nissan Revival Plans

Carlos Ghosn is known for his stripping the fat ' and returning to profit ' techniques . On one of the interviews , he stated that there are 2 facts ensuring the success of the merger , first , the clear vision from the start that what they are doing is a form of partnership and not acquisition , and second , the understanding that the synergies created are strictly to benefit both companies trough...

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