Renault and Nissan have announced a historic agreement on Monday to renew the alliance they signed almost 24 years ago with a better balance between the two brands. Each one will have 15% of the capital of the other and will be able to exercise political rights for that percentage, according to the statement issued yesterday.
Renault currently controls 43.4% of Nissan's shares, so the agreement requires it to divest itself of 28.4%. How will do? That is one of the great fringes that remains pending. To avoid a stock plunge with a sudden sale, it has been agreed that "Renault will transfer 28.4% of its Nissan shares to a French trust, where voting rights will be 'neutralized' for most decisions, but the economic rights (dividends and proceeds from the sale of shares) will always benefit Renault until the sale of those shares, ”says the French group. No deadline has been set for the sale, which is expected to take place when market conditions are "reasonable" and in an orderly process.
Nissan is also recognized for one of its historical demands: to be able to exercise voting rights for the 15% it owns in Renault.
The alliance was born unbalanced since 1999, when Renault became the lifeline for Nissan, which at that time was in a situation of extreme difficulty due to the large accumulated losses. First Renault entered Nissan and later the Japanese brand took 15% of the French group, but until now it had never seen its voting rights recognized.
The alliance, which provided for close collaboration on products and commercial offensives, has in fact been paralyzed for about four years, since the arrest of the previous president Carlos Ghosn for alleged embezzlement. Ghosn, who starred in a movie escape from Japan to Lebanon, was then planning to integrate Nissan directly into Renault. Some plans that fell very badly in Tokyo also taking into account that the French State is the main shareholder of the automobile group.
Now it has been decided to relaunch the collaboration with "operational projects of strong value creation". Specifically, key projects in Europe, Latin America and India are expected to be developed with three dimensions: markets, vehicles and technologies.
In addition, it includes Nissan's commitment to invest in Ampere, the electric vehicle and software business unit created by the French company. Nissan should become a reference shareholder of it.
The new agreement has required a long negotiation process, in which its president, Jean-Dominique Senard, and the CEO, Luca de Meo, have participated on behalf of Renault.
Nissan called the restructuring a move toward "balanced governance and shareholding to foster operational efficiencies."
The agreement will have to be approved by the boards of directors of Renault, Nissan and Mitsubishi, also integrated into the alliance in 2016 when it acquired Nissan 34%.
Nissan and Renault forged their alliance in 1999 with an initial investment by the French company of about 4,000 million dollars in the Japanese company, then mired in economic difficulties. Nissan then took 15% of Renault in 2002, without voting rights.
The former president of both firms Carlos Ghosn was one of the main architects of the alliance and since he left the leadership of the group at the end of 2018 as a result of his arrest in Japan.
