Renault to reduce stake in Nissan, rebalancing alliance

Renault to reduce stake in Nissan, rebalancing alliance

The international auto alliance
The international auto alliance. Photo: Kazuhiro NOGI / AFP/File
Source: AFP

PAY ATTENTION: See you at Legit.ng Media Literacy Webinar! Register for free now!

French automaker Renault will slash its stake in partner Nissan as part of a deal rebalancing the rocky alliance between the two companies, the Japanese firm said Monday.

Renault will reduce its stake from 43.4 percent to 15 percent, the same size as Nissan's stake in its French counterpart, as part of a broad agreement reshaping relations between the firms, Nissan said in a statement.

The agreement follows months of painstaking negotiations, and is expected to be signed next week following board approval from both sides.

Nissan also said it would invest in Renault's new electric vehicle business Ampere, although the size of the stake was not announced.

The Japanese company said the new deal would "strengthen the ties of the alliance and maximize value creation for all stakeholders".

The international auto alliance began in 1999, when Renault rescued Nissan from bankruptcy.

Read also

Toyota top-selling automaker for third year running

PAY ATTENTION: Сheck out news that is picked exactly for YOU ➡️ find the “Recommended for you” block on the home page and enjoy!

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 between the pair over the reshaping of their alliance, and Monday's announcement had been widely reported in recent months as the official announcement was repeatedly delayed.

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.

Read also

ECB to hike rates again, but outlook brightens

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 between the two companies.

Analysts see a rebalancing of the deal as a way to build confidence between Nissan and Renault.

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, 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.

Source: AFP

Authors:
AFP avatar

AFP AFP text, photo, graphic, audio or video material shall not be published, broadcast, rewritten for broadcast or publication or redistributed directly or indirectly in any medium. AFP news material may not be stored in whole or in part in a computer or otherwise except for personal and non-commercial use. AFP will not be held liable for any delays, inaccuracies, errors or omissions in any AFP news material or in transmission or delivery of all or any part thereof or for any damages whatsoever. As a newswire service, AFP does not obtain releases from subjects, individuals, groups or entities contained in its photographs, videos, graphics or quoted in its texts. Further, no clearance is obtained from the owners of any trademarks or copyrighted materials whose marks and materials are included in AFP material. Therefore you will be solely responsible for obtaining any and all necessary releases from whatever individuals and/or entities necessary for any uses of AFP material.