Renault agrees to cut stake in Nissan to 15%
Published on: Monday, January 30, 2023
By:
Nikkei, FMT
Nissan is set to invest in Renault’s new electric vehicle company Ampere.
TOKYO: Japanese automaker Nissan Motor and its French partner Renault have reached an agreement to reduce the latter’s stake in Nissan, Nikkei learned Monday.
The two companies will issue a statement saying they have reached a de facto agreement in the afternoon. The two companies will discuss the draft agreement at meetings of their respective boards, which have yet to be set.
ADVERTISEMENT
The agreement marks a turning point in the alliance, which began in 1999.
Makoto Uchida, president and CEO of Nissan; Luca de Meo, CEO of Renault; and other executive officers of both companies approved the proposed agreement.
Renault currently owns 43% of Nissan’s shares. That proportion is expected to drop to 15%, the same proportion of Renault shares owned by Nissan, putting the capital relationship on an even footing.
Nissan has also decided to invest in a new electric vehicle company, tentatively named Ampere, which Renault plans to create. Nissan is preparing to invest in Ampere, buying up to 15% of its shares, but the exact size of the stake has yet to be determined.
ADVERTISEMENT
In addition, the partners plan to promote new projects in India, Central and South America, and elsewhere.
After explaining the situation to its outside directors, Nissan is expected to hold an extraordinary meeting of the board of directors to formally approve the changes. The three-company alliance, which includes Mitsubishi Motors, is working on a schedule to announce details of the agreement in London on Feb 6.
ADVERTISEMENT
Nissan and Renault are expected to sign a legally binding agreement later on.
The two companies initially intended to wrap up the negotiations in October last year. However, during the talks, Renault expressed a desire to share patents and other assets jointly developed by the two companies with partners other than Nissan.
Nissan, however, was worried about technology leaks, and the two companies were unable to come to terms on how to handle intellectual property related to electric vehicles and other issues.
The issue of capital levels and investment in the new EV company were made into “one package,” according to a person familiar with the situation at Nissan, so “it was impossible to reach an agreement before all the other issues were finalised.”
Some people at Nissan were concerned about the role of the French government when it came to changing the capital ties between the carmakers.
In early January 2023, it was revealed that the French government had sent a letter to its Japanese counterpart, saying it would not oppose a reduction in Renault’s stake in Nissan. This encouraged Nissan to move forward with the negotiations.
The alliance was formed in 1999, when Renault acquired a 37% stake in Nissan, which was in financial trouble at the time.
However, the Renault shares held by Nissan have no voting rights due to French legal restrictions, and the Japanese automaker had long been frustrated by the unequal relationship.
In 2019, Renault, at the behest of the French government, proposed a merger with Nissan but the Japanese company opposed the idea and the proposal was scrapped.
The recent talks have taken place with many in Nissan feeling the capital relationship between the two automakers should change.
Stay up-to-date by following Daily Express’s Telegram channel.
Daily Express Malaysia
