Renault and Nissan on the verge of galvanising alliance with new agreement

On 30 January the Renault Group announced in a statement that, subject to the approval of its board of directors, it has reached an important milestone in its discussions on defining new foundations for the group’s partnership with Nissan Motor Co, Ltd.

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The restructuring of their two-decade-old car-making alliance will put them on equal footing and see the Japanese company invest in Renault's new electric vehicle business. The future shape of the Franco-Japanese alliance will also have implications for their junior partner, Mitsubishi.

According to the statement, this comes after months of “constructive discussions”.

Renault said their ambition in this regard was to strengthen the ties of the Alliance and maximise value creation for all stakeholders with a three-stage approach:

  • Reloading the partnership with high-value-creation operational projects
  • This would consist of key projects in Latin America, India and Europe, which would be deployed along 3 dimensions: markets, vehicles and technologies.
  • Nissan to invest in Ampere, the EV & Software pure player founded by Renault Group, aiming to become a strategic shareholder.
  • The Alliance Operating Board would remain the coordination forum.
  • Enhancing strategic agility with new initiatives that partners can join
  • A balanced governance and cross-shareholding to foster accelerated operational efficiencies
    • Renault Group and Nissan would retain a 15% cross-shareholding, with a lock-up obligation, as well as a standstill obligation. They would both be able to freely exercise the voting rights attached to their 15% direct shareholding, with a 15% cap.
    • Renault Group would transfer 28.4% of Nissan shares into a French trust, where the voting rights would be “neutralised” for most of the decisions, but the economic rights (dividends and shares’ sale proceeds) would still entirely benefit Renault Group until such shares are sold.
    • Renault Group would instruct the trustee to sell the entrusted Nissan shares if commercially reasonable for Renault Group in a coordinated and orderly process, but it would have no obligation to sell the shares within a specific pre-determined period of time.

The Statement concluded by saying that “the agreements are being finalised and the transaction remains subject to the approval of the boards of directors of Renault Group and Nissan. The Alliance members plan to make an announcement immediately after the board approvals.”

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