Renault to reduce its share in Nissan to “strengthen ties”

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Renault and Nissan confirmed on Monday January 30 that the first would reduce its share in the capital of the second to 15% against 43.4% currently, to put the two car manufacturers on an equal footing after months of complex negotiations.

“The ambition is to strengthen the links of the Alliance and maximize the creation of value for all stakeholders”according to a joint press release.

This is a major overhaul of the marriage conditions between the two groups, which since the beginning of their union in 1999 have known good times but also serious crises of confidence, especially after the spectacular fall of the boss of their alliance. Carlos Ghosn in 2018.

Obligation to cap their respective holdings

Renault and Nissan will each hold 15% of the capital of the other, “with an obligation to retain, as well as an obligation to cap their holdings”according to a joint press release.

However, the French group will not immediately sell the rest of its Nissan shares (28.4%) because their market value is much lower than their value currently recorded in its accounts.

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Also, to avoid massive depreciation, Renault will transfer this tranche to a trust based in France, where the voting rights attached to these shares will be “neutralized” for most decisions, is it specified in the press release. Renault will, however, continue to receive dividends on these securities until their actual sale, for which no specific deadline has been set.

New projects in Latin America and India

Nissan will also invest in Ampere, the future electric pole of its French partner, to become one of them. “strategic shareholder”. The amount of this commitment has not yet been specified.

New operational projects between Renault and Nissan are also planned in Latin America, India and Europe, according to the press release. The agreements on these different aspects “are being finalized” and must still be validated by the respective boards of directors of the two groups.

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