Merger fever as Daimler talks to Nissan

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The Independent Online
MERGER FEVER gripped the motor industry again yesterday amid reports that DaimlerChrysler was preparing to take a one-third stake in the ailing Japanese car maker Nissan.

The reports followed a meeting in Tokyo between the joint chairmen of DaimlerChrysler, Robert Eaton and Jurgen Schrempp, and the president of Nissan, Yoshikazu Hanawa.

After the meeting the two companies issued a statement saying that their discussions had been constructive and that they had explored possible co-operation projects. Further talks would take place in the near future.

At a later press conference, Mr Eaton fuelled speculation that a deal might be close by saying that DaimlerChrysler was "impatient" to strengthen its presence in Japan and Asia. "We want to go further and that could include producing right here," said Mr Eaton. "That will rely on close co-operation with potential partners."

Although Nissan is the world's fourth-biggest car-maker, a one-third stake in the company would cost just pounds 1.7bn. The stumbling block could be its enormous debts. Nissan has pounds 12.5bn of official interest-bearing debt on its books. But there is an estimated pounds 4bn of off-balance sheet debt in the shape of loans to suppliers and dealers.

DaimlerChrsyler is also negotiating over the purchase of Nissan's directly held stake in its truck and engine business Nissan Diesel.