Nissan to Consider Plan to End Renault Control of Alliance

  • Nissan discusses changes to structure of Renault alliance
  • France's move to boost Renault influence sparks new approach

Ghosn: Nissan-Renault Alliance Needs to Be Strengthened

Nissan Motor Co. is considering plans to restructure its alliance with Renault SA, including ending the French manufacturer’s voting rights, people familiar with the situation said.

A paper circulated to Renault board members by Nissan Chief Competitive Officer Hiroto Saikawa laid out a scenario that could grant the Japanese company voting rights in Renault, reversing the French carmaker’s one-sided control of the partnership, said the people, who asked not to be identified because the discussions are private. The document is part of a broader process to restructure the 16-year-old alliance, and no decisions are anticipated immediately, the people said. Saikawa is also a member of Renault’s board.

The structure of the alliance, which was put together when Nissan was near bankruptcy, has become a source of tension after the French government increased its shareholding in Renault without giving advance notice to Carlos Ghosn, the chief executive officer of both carmakers. The move meant France has more influence over the group than Nissan, which generates a majority of the profit.

The alliance between Renault and Nissan is “important for both groups and we want to keep it and keep it balanced,” France’s Economy Minister Emmanuel Macron said in Paris on Tuesday. The balance “must not be jeopardized.”

Nissan shares rose 1.6 percent to 1,262.50 yen in Tokyo. Renault shares fell 0.4 percent to 81.16 euros as of 12:13 p.m. in Paris.

Unequal Holdings

The alliance is currently secured by unequal cross shareholdings as well as Ghosn’s dual role. The French carmaker owns 43.4 percent of Nissan, which in turn holds 15 percent of Renault. Under French law, the Japanese company doesn’t have voting rights for its stake because Nissan is considered under Renault control. Those voting rights could be revived if Renault’s stake falls to less than 40 percent, and Renault is also considering that move, people familiar with the situation said earlier this month.

“Nothing is more important than preserving the alliance,” Ghosn said to reporters in Tokyo on Tuesday. “All parties, all stakeholders want the same thing -- a stronger alliance.”

Nissan suggested balanced holdings with Renault in a range of 25 percent to 35 percent, according to the paper, which was reported earlier by Reuters.

The Yokohama-based automaker said it is “fully committed to the success of the alliance and the considerable benefits the alliance has brought to all parties,” declining to comment on the alliance’s structure. Renault declined to comment.

The dispute with France was sparked after the government increased its stake in Renault to 19.74 percent from 15.01 percent. The move was meant to boost France’s power at one of the country’s key manufacturers through a law that doubles the voting rights of investors who hold stock for more than two years. France has yet to reduce the stake back to its original level as planned.

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