Renault and Nissan confirm review of their alliance

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After 3 months of negotiations, the French automaker will reduce its stake in the Japanese company to 15% of the capital, against the current 43.4%. The Renault-Nissan alliance was created in 1999, by Carlos Ghosn Kenzo Tribouillard/AFP The French automaker Renault will reduce its stake in the Japanese company Nissan to 15% of the capital, against 43.4% currently, after three months of tough negotiations to balance forces in the alliance between the groups. “The ambition is to strengthen alliance ties and maximize value creation for all parties involved”, including new projects in Latin America, informs a joint statement. This is a major reorganization of the conditions of association between the two groups, which since the beginning of their alliance in 1999 have seen great periods, but also serious crises of confidence, in particular after the fall of former CEO Carlos Ghosn in 2018. Renault and Nissan will each hold 15% of the capital of the other group, “with the obligation to preserve the participation, as well as the obligation to establish a cap on their participation”, informs the statement. The French group, however, will not immediately sell the rest of its shares in Nissan (28.4%) because its market value is much lower than the price currently recorded in its accounts. Furthermore, to avoid significant writedowns, Renault will transfer the package to a trust fund based in France, where the voting rights corresponding to these shares will be “neutralized” for most decisions, the French company said in the statement. Renault will continue to receive dividends on these shares until the sale, for which no specific deadline has been set. Nissan, for its part, already owned 15% of Renault’s shares, but was deprived of voting rights, a restriction that will be lifted. “It’s not a victory for Nissan over Renault,” said a French source close to the talks when asked by AFP a few months ago. If Nissan’s “frustration” in its relationship with Renault was very visible, the French group was also dissatisfied with the situation and wanted to “normalize” it so that cooperation became more effective and faster, according to the same source. Nissan will invest in Ampere, Renault’s future electric car division, to become a “strategic shareholder”, the Japanese group said. New operational projects are also planned between Renault and Nissan in Latin America, India and Europe, according to the statement. Agreements on the various issues “are being finalized” and still need to be approved by the boards of directors of each automaker.

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