Shares in the French carmaker Renault soared by up to 8.3% this morning as the company enters talks to merge with Japanese manufacturer Nissan.
However, Tokyo-based Macquarie Capital Securities analyst Janet Lewis told the news site that experts are worried the French and Japanese governments may oppose the deal.
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“Size matters in the auto industry,” Lewis said, but “the concern has always primarily been the French government, and somewhat Japan, because both France and Japan like to keep their national champions”.
The deal has yet to be confirmed by either of the two firms, which also partnered with Mitsubishi in 2016. A Renault-Nissan spokesperson told the BBC: “We do not comment on rumours and speculation.”
If the merger were to go ahead, it could create one of the world’s largest carmakers, says Sky News.
Although the two firms already share components, such as engines and production architecture, the new deal could “result in significant savings”, the news broadcaster says.
Renault currently holds a 43% stake in Nissan, while the Japanese car giant owns a 15% share of the French firm, The Independent reports.