Renault and Nissan shake up alliance with equal shares and EV deal

Renault and Nissan have agreed to equalise their holdings in each other, repairing the carmakers’ 24-year-old alliance and enabling greater co-operation on electric vehicles.

Under the deal, France’s Renault will cut its 43 per cent stake in Japan’s Nissan to 15 per cent by transferring a 28.4 per cent stake to a French trust, where the voting rights will be “neutralised” for most decisions, the groups said on Monday.

Renault will sell the shares in the trust when it makes sense financially, although it is under “no obligation” to divest in a certain timeframe, they added. Meanwhile, Nissan will hold on to its 15 per cent stake in Renault as part of the agreement and gain the voting rights it had long requested.

Alongside the shareholding shake-up, the deal also includes an agreement for Nissan to take a minority stake in Ampere, Renault’s electric vehicle spin-off, and invest in several new joint production plans.

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The joint projects in Latin America, India and Europe come with the aim of “reloading the partnership”, the two companies said.

Negotiations had been taking place for months, and the final details were not settled even hours before the statement came out, according to people familiar with the discussions.

The strongest opposition came from the Japanese carmaker’s non-executive directors. They expressed concerns about whether the deal “would sufficiently protect Nissan’s interests”, one of the people said.

Although the imbalance created underlying tension within the alliance, its former head Carlos Ghosn was largely successful in papering over the differences.

Following his arrest in 2018 on financial misconduct charges, which he has denied, and with no strong figure to bind the group together, the alliance came close to collapse for the first time in two decades.

Executives at Renault hope that the reset in capital ties will create goodwill to move ahead on joint operational projects, after Nissan’s long-running frustration with the alliance’s lopsided structure.

People close to Nissan also said the new framework provided a way for the two companies to hold more constructive discussions on technology sharing and strategy.

“There can’t be a worse situation than the current one. There was just distrust and hardly any co-operation any more,” said one person familiar with the alliance.

Daniel Röska, an automotive industry analyst at Bernstein, said the deal finally resolved the “Gordian knot” linking the two businesses.

He said the new joint projects were likely to be “deal sweeteners in order to get Nissan over the line on the Ampere IPO”.

Keeping the partnership allows the groups to at least hold on to some concrete savings, such as from joint purchasing programmes, at a time when carmakers globally need to make massive investments in electric vehicles and other innovations.

Renault also needed Nissan’s green light for some elements of its own reorganisation, as the French carmaker was trying to lift revenues and margins under chief executive Luca de Meo. This included the planned Ampere spin-off, which should come to the London stock market this year, people familiar with those plans said.

Nissan and Renault had locked horns over intellectual property rights linked to some of the technology involved, although this stand-off has been largely resolved.

Renault is also due to carve out a new division dedicated to combustion engines, including gasoline and hybrid motors. Chinese automaker Geely will bring assets to the unit, which will sell engines to third parties.

Renault and Geely are in talks with Saudi Aramco, which could come in as an investor with a stake of 10 to 20 per cent, four people close to those talks said, while the two carmakers would be equal partners in the rest of the venture.

The terms of that deal have not been finalised, but Aramco’s investment would value the unit at between €5bn and €10bn, three of the people said. The Saudi oil group has been developing research on synthetic fuels.

Aramco did not respond to requests for comment.

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