Renault wants to go ahead with its plans to curve out electric and combustion-engine businesses, but needs its Japanese partner’s approval and money to proceed.

That would mean for Renault to give up some of its 43% share in Nissan.

A full merger of the two carmakers would be the most logical step forward. A fact that makes such a move unlikely is the scandal surrounding ex-Nissan Chairman Carlos Ghosn.

The fugitive former Nissan Motor boss was the main figure responsible for hiding his earnings in key securities reports, as the Tokyo District Court determined on March 4, blaming greed and the automaker’s weak governance for the high-profile scandal.

The French government’s grip on Renault is the second key-factor in the way of a merger. Also, the alliance’s lopsided governance is another problem.

Renault holds a 43% stake in Nissan but the Japanese group is prohibited by French law from exercising voting rights associated with its 15% stake in Renault.

Nissan grew its sales by 7.1% in the year ending March 2022. It has 1.3 trillion yen ($8.9 billion) in cash, which could be used to buy back shares.

Forging a closer relationship with Renault’s mooted EV unit would spread the costs of developing new technology.

For Renault things look harder. If its share in Nissan fell back to 15%, the Japanese group would recover its voting rights in Renault.

It would no longer be deemed to be under the French group’s control, and the French government would also have less grip, since it has a 15% share in Renault.

Analysts at RBC, cited by Reuters, reckon the French group’s own operations would justify a market capitalization of €10.5 billion.

That implies the current value of just over 9 billion euros assigns little worth to the Nissan stake.

Cutting the slice to a 15% holding would generate nearly 4 billion euros, before tax, around 40% of Renault’s current market capitalization.