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Nissan's stock surges after GM alliance talks called off

Nissan's stock surges after GM alliance talks called off

Nissan's shares surged Thursday as investors reacted with relief to news that General Motors called off talks on possibly creating a three-way alliance with Nissan Motor Co. and partner Renault SA of France.
The three-month-long talks came undone as Renault and Nissan declined to pay a premium for reaping what GM said would have been a disproportionate share of the benefits, according to a joint statement issued by the companies.
"We've somewhat expected the outcome so we just take it as is," Nissan Chief Operating Officer Toshiyuki Shiga told public broadcaster NHK. "A deal like this is difficult unless each participant is positive about an alliance as a benefit."
Nissan's stock jumped on the news, climbing 2.56 percent to 1,357 yen (US$11.53; euro9.09) at the end of the morning session.
Investors and analysts had worried that a tie-up with GM, faced with towering health care and struggling to turn around its business, would burden Nissan and Renault, which hold stakes in each other.
With the proposal out of the picture "a risk is gone," Mitsubishi UFJ Securities analyst Shotaro Noguchi said, allowing Nissan to concentrate on its own business and rebuilding falling sales in Japan, North America and Europe.
"The market never believed anything was going to happen anyway, so it's hard to say it should be disappointed," said Kurt Sanger, an analyst with Macquarie Securities in Tokyo.
Nissan spokesman Yuichi Nakagawa declined to comment on the stock's surge in price.
GM, the world's largest automaker, lost US$10.6 billion last year, shuttering plants and has been steadily losing market share to Asian rivals. But last quarter, if not for restructuring charges, the company would have logged a hefty profit _ proof, management says, that a turnaround is underway.
Renault owns a 44 percent stake in Nissan, which in turn holds 15 percent of the French auto maker.


Updated : 2021-06-13 20:09 GMT+08:00