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Renault and Nissan shift gears on alliance / Photo: Kazuhiro NOGI - AFP/File
NYSE - LSE
Renault and Nissan shift gears on alliance
Renault and Nissan said Monday they had revised their partnership to allow for a reduction in their cross-shareholdings and other measures that would help the financially troubled Japanese carmaker.
The new agreement will allow the carmakers to reduce their current 15 percent cross-shareholdings to 10 percent.
Renault will also acquire Nissan's 51 percent stake in their joint factory in the Indian city of Chennai, which will produces Nissan vehicles.
Nissan will no longer be required to invest in Renault's electric vehicle development unit, Ampere, although the French company will continue to develop and manufacture an electric version of its subcompact Twingo for Nissan to sell in Europe.
"Renault Group has a strong interest in seeing Nissan turnaround its performance as quickly as possible," Renault Group chief executive Luca de Meo said in a statement.
The two carmakers have been partners since 1999 when Renault rescued Nissan from bankruptcy. But numerous tensions emerged, particularly over Renault's greater holding in Nissan, and in 2023 the carmakers worked to rebalance their alliance.
But Nissan announced last year thousands of job cuts after reporting a 93 percent plunge in first-half net profit, and it expects to post a loss of over $500 million for 2024.
Its CEO Makoto Uchida stepped down earlier in March after merger talks with Honda fell apart.
"Nissan is committed to preserving the value and benefits of our strategic partnership within the Alliance while implementing turnaround measures to enhance efficiencies," said incoming Nissan CEO Ivan Espinosa.
The amended alliance agreement will not impact the additional 18.66 percent stake in Nissan that Renault holds in a French trust. Those shares do not give Renault voting rights in Nissan under their alliance agreement, unlike the 15 percent holding.
(L.Thomas--TAG)
