Renault's reduction in its stake of alliance partner Nissan has seen its partnership continue. (Photo by Kazuhiro NOGI / AFP)
French automaker Renault will slash its stake in Japanese partner Nissan as part of a deal rebalancing the rocky alliance between the two companies, the firms said Monday.
The deal will also see Nissan take a stake in Renault’s new electric vehicle venture Ampere, though the size of the investment was not immediately announced.
The agreement comes after months of painstaking negotiations, and repeated delays, as the two firms sought to reset their decades-old alliance after years of tensions.
The automakers called Monday’s 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 maximise value creation”, the statement issued simultaneously by both companies said.
Renault will 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 will also invest in Ampere, “aiming to become a strategic partner”, the firms said, without specifying how large the Japanese automaker’s stake would be.
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In November, Renault announced that it would split its operations in two; Ampere, and a separate subsidiary for petrol, diesel and hybrid cars that will pair up with China’s Geely.
But concerns at Nissan about future technology transfers to the Chinese carmaker, 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 in 2016, when Nissan took a 34 percent stake in its struggling Japanese rival.
But the union was destabilised by the 2018 arrest of Nissan boss 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 will not immediately sell the outstanding 28.4 percent 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 trust for sale when prices improve, with no time limit placed on the process.
Its voting rights will be “neutralised” for most decisions, the companies said, but it will retain rights to dividends and shares’ sale proceeds until it sells.
In March 1999, Renault comes to the rescue of heavily indebted Nissan, which needs a partner in order to survive.
Under a deal signed in Tokyo, the French firm takes nearly 37 percent of its Japanese rival. Later that year, Renault number two Ghosn unveils a recovery plan for Nissan, including 21 000 job losses.
As the two companies cooperate on distribution, purchasing and manufacturing, their alliance starts to bear fruit.
A recovering Nissan takes a 15 percent share in Renault in 2002, and the pair set up a joint management structure. Renault ups its stake in Nissan to more than 44 percent, which is later trimmed to around 43 percent.
By 2003, Nissan has become the world’s second-biggest carmaker by market capitalisation, and in 2005 Ghosn takes the reins of both firms.
Tensions erupt in 2015. Nissan is angry that the French state’s stake in Renault’s capital has been increased to nearly 20 percent (it has since dropped back to 15 percent).
But they reach an accord that caps the French government’s ability to interfere in the alliance’s affairs.
The group expands in 2016 to include struggling carmaker Mitsubishi Motors, with Nissan acquiring around a third of its Japanese rival.
In 2017, Ghosn cedes the post of Nissan CEO to Hiroto Saikawa, but remains chief of Renault and the three-way partnership.
That year, the alliance claims the title of the world’s top-selling auto company, ahead of Toyota and neck-and-neck with Volkswagen.
Ghosn is arrested in November 2018 on financial misconduct charges. He is held in custody in Tokyo, and replaced at all three companies as the alliance reels.
In July 2019, crisis-hit Nissan says quarterly net profit plunged nearly 95 percent and announces 12 500 job cuts.
That September, the Japanese firm announces Saikawa’s departure after he admitted to receiving excess pay by altering the terms of a bonus. The next month Nissan names a new CEO, Makoto Uchida, who is seen as more pro-alliance.
In the last days of 2019, Ghosn jumps bail and escapes from Japan hidden in an audio-equipment box, landing in Beirut.
Soon, the Covid-19 pandemic pushes the Ghosn controversy off centre stage and brings fresh economic mayhem to the alliance, paralysing production lines.
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In May 2020, Renault-Nissan-Mitsubishi unveil a plan to deepen their cooperation, planning to develop nearly half of cars jointly.
In January 2022, the alliance announces it will invest 23 billion euros ($22 billion) into electric vehicles over five years, working together on manufacturing platforms.
Just weeks later, it emerges that Renault wants to split its electric vehicle and combustion engine businesses – kicking off negotiations about the union’s future.
In May, with war raging in Ukraine, Renault quits the Russian market, pushing the French carmaker deep into the red after the woes of Covid-19.
The companies announce in January, that Renault will slash its stake in partner Nissan as part of a deal to rebalance their alliance.
Renault will reduce its share in Nissan to 15 percent, the same size as Nissan’s stake in its French counterpart, and the Japanese company will also invest in Renault’s new EV business Ampere.
The agreement, which follows months of painstaking negotiations, is expected to be signed later in the month, following board approval on both sides.
Additional information from reuters.com.