By Adam Whittaker

Renault shares jumped after carmaker Honda said it was exploring a merger with Nissan, Renault's Japanese partner.

In early morning European trade, Renault shares rose 5.2% to 46.81 euros.

Renault recently agreed to reduce its stake in Nissan to 15% from more than 43%.

The two Japanese carmakers said Wednesday that no final decision has been made about a future tie-up.

The two companies have been working together on electrification technologies in an attempt to cut research-and-development costs as car sales slump and competition from Chinese rivals increases.

Jefferies analysts said a Honda-Nissan combination would be positive for Renault shares given the strategic options it presents.

The merger could allow Renault to exit Nissan at a higher price or enable it to continue holding a small stake in the new entity which is likely to benefit from synergies and have improved return prospects, the analysts wrote.

Write to Adam Whittaker at adam.whittaker@wsj.com

(END) Dow Jones Newswires

December 18, 2024 04:00 ET (09:00 GMT)

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