Renault to lose 28% stake in Nissan in restructuring deal

January 30, 2023

Members of the Renault-Nissan-Mitsubishi Motors alliance are expected to give final approval to a restructuring deal that would cut Renault's ownership stakes within the longtime partnership. File photo by Keizo Mori/UPI | License Photo
Jan. 30 (UPI) -- Two of the world's biggest automakers have agreed to overhaul their partnership in a restructuring deal that would significantly curtail Renault's controlling interest in Nissan. The major corporate shakeup forces French manufacturer Renault to give up nearly 30% of its ownership stake in the Japanese carmaker in an effort to reconfigure the coalition's shareholdings amid a shifting global economic landscape fraught by inflation and consumer shock. Advertisement
Prior to the agreement, Renault held 43% of Nissan but will now see its stake reduced to 15%.
The move would allow both companies to "freely exercise the voting rights attached to their 15% direct shareholdings, with a 15% cap," the companies announced Monday in a statement.
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The deal was reached after months of intense negotiations and is now pending final approval by an executive board.
As part of the agreement, Renault will transfer 28.4% of its shares into a French trust, reducing its decision-making power in the strategic business alliance that was formed in 1999 and later joined with Mitsubishi Motors to become an industry giant that continues to sell billions of major auto brands worldwide.
The most critical loss for Renault in the deal appears to be its voting rights on the company's primary decisions, however, it will retain some say over matters such as dividends and share sale proceeds, which "would still entirely benefit to Renault until such shares are sold."
"The ambition is to strengthen the ties of the Alliance and maximize value creation for all stakeholders," Nissan said.
Under the agreement, Renault can instruct a trustee to sell shares so long as the transaction is "commercially reasonable" and part of a "coordinated and orderly process."
Nissan said it plans to invest in Renault's electric vehicle production arm, Ampere, and other "high-value-creation operational projects" throughout Europe, India, and Latin America.
In late 2022, Renault signed a deal with Chinese automaker Geely to produce hybrid powertrains and engines. The French automaker is also currently working with Google to create a "software-defined" vehicle, and is partnering with U.S. tech giant Qualcomm to build software defined vehicle platforms.
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This data comes from MediaIntel.Asia's Media Intelligence and Media Monitoring Platform.

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