Renault in discussion to sell off Nissan stake – report

Renault can reduce its ownership rate in Nissan as part of a plan to separate itself into separate electric and internal combustion engine companies.

We first heard about this potential course of action back in April. The current Bloomberg said discussions between the two companies have been moved to a high stage.

Over the weekend, Luca de Meo, CEO of the Renault Group, and Francois Provost, head of international development and Renault partner, reportedly held “prolonged discussions” with Makoto Uchida , CEO of Nissan and Ashwani Gupta, CEO of Nissan.

According to the business website, these four men were locked in negotiations during the F1 Japanese Grand Prix in Suzuka on Saturday and Sunday. On Monday, they all flew to Yokohama to continue their discussions at Nissan’s headquarters.

While the details are still being worked out, the broad sketch is expected to see Renault reduce its stake in Nissan from its current 44% to 15%, in line with Nissan’s stake. at Renault.

In order to maximize its profits, Renault will not sell its shares right now when the market is trending down, and this sale will not happen in a batch. Instead, the shares Renault intends to sell can be put into a trust for sale at a later date.

Renault is also expected to agree to rules that would prevent the sale of its shares to a competitor or an activist investor. Nissan may also be given the right of first refusal on any shares sold by Renault.

Alternatively, Renault may also voluntarily limit its voting rights to 15% immediately. In return, Nissan could invest in Renault’s upcoming electric vehicle division, with reports suggesting Nissan could secure up to a 15% stake in the France-based unit.

Reported highlights include Renault’s desire to sell its petrol, diesel and hybrid powertrain technology to Aurobay, a powertrain joint venture between Volvo and parent company Geely.

Geely and Renault have made many deals over the past year, which will see the Chinese carmaker automotive design and manufacture for Renault in China, as well as holding a 34% stake in the division formerly known as Renault Samsung Motors.

Neither company has confirmed the details of the report, but they released a joint statement overnight saying they had “credible discussions” over the weekend.

Nissan and Renault said their discussions included “joint strategic initiatives across markets, products and technologies”, as well as “Nissan’s consideration of investing in the new Renault EV entity”. .

Finally, the two companies also said they are looking to “drive structural improvements to ensure the operation and governance of the Alliance is sustainable,” perhaps alluding to the change in their holdings and how two automakers interact.

The current Renault-Nissan-Mitsubishi alliance traces its history back to the late 1990s, when Renault bought about 36% of Nissan’s shares, a share that has since grown to 44%.

Nissan at the time was wearing red ink in the aftermath of Japan’s bubble economy, and had a range of vehicles that could be described as a bit bland.

Under the leadership of Renault-appointed Carlos Ghosn, Nissan downsized, downsized its vehicle lines, formed a formal alliance with controlling stakeholders, and returned to profitability.

During Ghosn’s time as CEO of both companies, the sharing of platforms between the two companies gave them scale to compare with Volkswagen and Toyota.

Many members of Nissan’s senior leadership are said to be concerned that Ghosn is planning to move the relationship away from the current alliance by instigating a full-blown merger. There is also much discontent about Renault’s control of Nissan, especially since the Japanese automaker has now become more profitable and successful than its French counterpart.

Reports suggest that Ghosn’s arrest for financial misconduct in 2018 was motivated by the desire of some within the company to prevent any potential mergers.

After Ghosn’s spectacular arrest, and subsequent Hollywood-worthy escape in a toolbox loaded onto a private jet, the Confederates struggled to find direction without have their own longtime leaders, and both Renault and Nissan deposed post-Ghosn CEOs.

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