Highlights
- This is part of Renault and Nissan's new rebalancing strategy.
- Renault will slash its 43.4% stake in Nissan to 15%, and the rest will be sold.
- Renault and Nissan are expected to sign the dotted lines soon.
French carmaker Renault has announced that it will reduce its stake in Japanese partner Nissan as part of the new rebalancing strategy. Renault, which currently holds a 43.4 per cent stake in the Japanese car brand will slash it down to 15 per cent, the same size as Nissan’s stake in the French automaker. Nissan has said that it is part of a broad agreement reshaping relations between the two companies.
The announcement comes after months of tedious negotiations between the two companies. It’s reported that they were complicated by concerns about intellectual property sharing as Renault sought to build several new tie-ups with companies outside the alliance. Renault and Nissan are expected to sign the dotted lines next week following board approval from both sides.
The two companies have been discussing reshaping their alliance for some time now, and Nissan has said that the new deal would “strengthen the ties of the alliance and maximize value creation for all stakeholders”.
Nissan has stated that it also plans to invest in Renault’s new EV business, although the size of the stake was not announced.
In November, Renault announced that it would split its operations in two – its new venture Ampere, and a separate subsidiary for petrol, diesel and hybrid cars that will pair up with China’s Geely. And even Nissan has stated that it also plans to invest in Renault’s new EV business, although the size of the stake was not announced. However, concerns at Nissan about future technology transfers to the Chinese carmaker, as well as details over the sharing of electric vehicle intellectual property, led to repeated delays.
After the deal, the French automaker will not immediately sell the outstanding 28.4 per cent of its Nissan shares because the current market value is lower than that registered in Renault’s accounts. Instead, the shares will be placed in a French trust. Renault would then instruct the trustee to sell those shares, worth around $4.1 billion at current market values, if commercially reasonable for the French automaker, in a coordinated and orderly process, it added.
Since the two automakers announced they were in negotiations to restructure their alliance in early October, shares in Renault have gained almost 25 per cent, while Nissan shares are up just 3 per cent. This decision will surely have implications for both companies as well as their junior partner, Mitsubishi Motors Corp, which joined the alliance in 2016 when Nissan took a 34 per cent stake in its struggling Japanese rival.
With inputs from AFP and Reuters
Keyword: Renault To Reduce Stake In Nissan From 43% To 15% As Part Of Rebalancing Act