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Renault Finalising Transfer of 28% Stake in Nissan

Renault Finalising Transfer of 28% Stake in Nissan
Luca de Meo, chief executive officer of Renault, left, and Makoto Uchida, CEO of Nissan, in London on Feb. 6, 2023.

Renault SA and Nissan Motor Co. completed a landmark deal to rebalance their 24-year-old alliance, paving the way for a new relationship after years of acrimony between the two partners.

The automakers on Wednesday announced the creation of a French trust to which Renault transferred 28.4% of Nissan shares. The companies first disclosed plans for the trust in January.

Renault and Nissan now have a cross-shareholding of 15% with lock-up and standstill obligations, the companies and junior alliance partner Mitsubishi Motors Corp. said in a statement.

Renault managers in recent weeks have reiterated that staff should no longer share information with their Nissan counterparts, according to people familiar with the situation, after the French carmaker announced in September that aspects of the alliance would be unwound by year-end.

Read more: Renault, Nissan Unwind Key Alliance Structure for Purchases

Taken together with the deal to equalize their cross-shareholdings at 15%, the developments are the clearest indications yet that members of one of the world’s biggest automotive tie-ups are increasingly going their separate ways.

The sell-down of shares held by the trustee will be coordinated with Nissan, which will have the right of first offer to purchase the stock. The trust will have no obligation to sell the shares within a specific or pre-determined period of time.

“The Alliance might work much more efficiently now that it has been in the past years and decade as it will focus on specific projects with clear benefits for each of the partners,” Oddo BHF analysts including Michael Foundoukidis wrote in a note.

Renault told employees in September it was moving away from common structures with Nissan in favor of a new, project-by-project approach to working together. The dissolution of the companies’ joint purchasing organization means the two will no longer pool information on a regular basis due to antitrust concerns.

The new alliance deal presented to investors in London in February followed months of tense negotiations that nearly collapsed late last year due to sticking points on intellectual property and disagreement over the valuation of Renault’s electric-vehicle and software arm Ampere, in which Nissan has agreed to invest.

The alliance dates back to 1999, when Renault rescued Nissan with a cash injection and the two formed one of the biggest auto partnerships in the industry. Rivalries and mutual suspicion mounted over the years and came to a head when former leader Carlos Ghosn openly contemplated merging the two companies, contributing to his downfall.

Read more: Renault and Nissan’s CEOs Loosen Up Alliance to Keep It Alive

Renault now plans to use proceeds from Nissan stake sales to continue investing in Ampere, its Alpine sports-car division, and its recycling unit, Renault Chief Financial Officer Thierry Pieton told analysts during a quarterly call last month.

“For us, it’s a question of allocating the capital to things that are going to provide a better return on investment compared to what we’re getting or what we’re expecting to get from Nissan,” Pieton said.

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