French automaker Renault SA is to slash its stake in Japanese partner Nissan Motor Co as part of a deal rebalancing the rocky alliance between the two companies, the firms said yesterday.
Under the deal, Nissan would take a stake in Renault’s new electric vehicle venture Ampere, although the size of the investment was not immediately announced.
The agreement came after months of painstaking negotiations, and repeated delays, as the two firms sought to reset their decades-old alliance after years of tensions.
Photo: AFP
They called the announcement “an important milestone” in “discussions on defining new foundations for their partnership.”
The agreement is intended to “strengthen the ties of the alliance and maximize value creation,” the statement issued simultaneously by both companies said.
Renault is to reduce its stake from 43.4 percent to 15 percent, the same size as Nissan’s stake in its French counterpart, in what the firms said would produce “a balanced governance.”
Nissan is also to invest in Ampere, “aiming to become a strategic partner,” the firms said, without specifying how large the Japanese automaker’s stake would be.
In November last year, Renault announced that it would split its operations in two — Ampere, and a separate subsidiary for gasoline, diesel and hybrid vehicles that would pair up with China’s Geely Holding Group Co (吉利控股集團).
However, concerns at Nissan about future technology transfers to the Chinese automaker, as well as details over the sharing of electric vehicle intellectual property, complicated the negotiations.
The agreement is expected to be signed next week following board approval from both sides.
The international auto alliance began in 1999, when Renault rescued Nissan from bankruptcy.
They were joined by Mitsubishi Motors Co in 2016, when Nissan took a 34 percent stake in its struggling Japanese rival.
The union was destabilized by the 2018 arrest of former Nissan CEO Carlos Ghosn, who claimed the charges against him were intended to prevent him from bringing the Japanese and French automakers closer together.
Discussions have been held behind closed doors and the announcement was repeatedly previewed, but then postponed.
Still, analysts have described the rebalancing of the deal as a way to build confidence between Nissan and Renault, particularly after the fallout from the Ghosn scandal.
There is also scope for the firms to cooperate on electric vehicles, given Nissan’s existing technologies and Renault’s greater access to the European market.
After the deal is signed, the French automaker would not immediately sell the outstanding 28.4 percent of its Nissan shares because the market value is lower than that registered in Renault’s accounts.
Instead, the shares would be placed in a trust for sale when prices improve, with no time limit placed on the process.
Its voting rights would be “neutralized” for most decisions, the companies said, but it would retain rights to dividends and shares’ sale proceeds until it sells.
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