# Nissan and Renault agree to overhaul alliance, this time as equals Author: Pal Sinha, Barnali Author URL: https://financedigest.com/author/pal-sinha-barnali Published: 2023-01-30 Category: NEWS Category URL: https://financedigest.com/category/news Meta Title: Nissan Motor Co and Renault SA alliance remake agreement Meta Description: Nissan and Renault agree to a new alliance structure, with Renault reducing stake in Nissan to 15% and Nissan investing in Renault's EV business. URL: https://financedigest.com/nissan-and-renault-agree-to-overhaul-alliance-this-time-as-equalshtml ![undefined](https://prod.superblogcdn.com/site_cuid_cm5qst7v3003gwirgwqtxn8i8/images/2023-01-30t065809z4lynxmpej0t044rtroptp4autoshow-la-1736814525809-compressed.jpg) By Maki Shiraki and Gilles Guillaume TOKYO/PARIS (Reuters) -Nissan Motor Co and Renault SA agreed on Monday to a sweeping remake of their two-decade-old automaking alliance that will put them on equal footing and see the Japanese company invest in Renault’s new electric vehicle business. The joint announcement capped nearly four months of intense talks that sources told Reuters were complicated by concerns about the sharing of intellectual property as Renault sought tie-ups with companies outside their alliance. The deal, still subject to board approvals, will see [Renault reduce its stake in Nissan](https://www.financedigest.com/from-boom-to-bottom-and-now-big-change-renault-and-nissan-reshape-alliance.html "From boom to bottom and now big change: Renault and Nissan reshape alliance") to 15% from around 43%, it said. That will see Renault put around 28% of the Japanese automaker in a French trust, crucially making the two more equal partners. Their unequal relationship had long been a source of friction among Nissan executives. While [Renault bailed out Nissan](https://www.financedigest.com/nissan-renault-to-invest-600-million-to-make-6-new-models-in-india.html "Nissan, Renault to invest 0 million to make 6 new models in India") two decades ago, it is the smaller automaker by sales. The alliance, which was also includes junior partner, Mitsubishi Motors Corp, was deeply strained by the ouster of its architect and former chairman, Carlos Ghosn, [amid financial](https://www.financedigest.com/how-to-support-employees-amid-financial-strains.html "How to support employees amid financial strains") scandal. Nissan and [Renault](https://www.financedigest.com/renault-and-nissan-in-talks-that-could-reshape-autos-alliance.html "Renault and Nissan in talks that could reshape autos alliance") will now have a 15% cross-shareholding that will allow Nissan to exercise its voting rights, which it was unable to do previously. The ability to exercise voting rights is welcome from a corporate governance perspective and acts as a guardrail to keep interests aligned between the two parties,” said Jon Withaar, head of Asia special situations at Pictet [Asset Management](https://www.financedigest.com/french-watchdog-fines-h2o-asset-management-executives-over-tennor-investments.html "French watchdog fines H2O Asset Management, executives over Tennor investments"). The [deal includes a lock-up that prevents share](https://www.financedigest.com/u-s-mid-tier-lenders-shares-rise-in-frankfurt-after-svb-deal.html "U.S. mid-tier lenders shares rise in Frankfurt after SVB deal") sales for a certain period, as well as a standstill obligation, which puts other limits on a stock sale. [Shares of Renault were 3.8% lower](https://www.financedigest.com/ford-posts-lower-profit-issues-downbeat-outlook-shares-drop.html "Ford posts lower profit, issues downbeat outlook; shares drop") in Paris trade at 0850 GMT. The [market may have been waiting](https://www.financedigest.com/jittery-markets-attempt-risk-on-rally-while-waiting-for-powell.html "Jittery markets attempt risk-on rally while waiting for Powell") for more details, said Gregoire Laverne, a fund manager at Apicil Asset Management, which holds Renault shares. FREE REIN For Nissan, any negative impact from a potential [share sale](https://www.financedigest.com/monte-dei-paschi-to-have-underwriting-consortium-for-share-sale-by-tuesday-source.html "Monte dei Paschi to have underwriting consortium for share sale by Tuesday – source") by Renault was likely to be short-lived, said Masayuki Kubota, chief strategist at Rakuten Securities in Tokyo. The Japanese automaker would get freer rein in the longer term to adopt a strategy focused on the United States, China and [emerging markets](https://www.financedigest.com/medical-nonwoven-disposables-market-scope-emerging-trends-analysis-and-forecast-2028.html "Medical Nonwoven Disposables Market Scope Emerging Trends, Analysis and Forecast 2028"), he said. Renault plans to instruct the [French trustee to sell the Nissan shares](https://www.financedigest.com/ubisoft-shares-slump-20-after-french-video-game-maker-warns-on-revenue.html "Ubisoft shares slump 20% after French video game maker warns on revenue"), worth around $4.1 billion at current market values, if commercially reasonable for Renault, in a coordinated and orderly process, it said. [Since the two automakers announced they were in negotiations to restructure their partnership in early](https://www.financedigest.com/first-quarter-dash-for-cash-largest-since-early-2020-bofa.html "First quarter ‘dash for cash’ largest since early 2020 -BofA") October, shares in Renault gained almost 25%, while Nissan shares, facing a potential stock overhang, were up just 3%. As part of the deal, [Nissan and Renault](https://www.financedigest.com/nissan-pushes-partner-renault-to-sell-down-stake-may-raise-funds-source.html "Nissan pushes partner Renault to sell down stake, may raise funds -source") have pledged to pool more resources into key projects in Latin America, India and Europe, involving markets, vehicles and technologies. Nissan also said it would [invest in Renault’s new battery-electric vehicle](https://www.financedigest.com/sainsburys-pays-524-million-for-full-ownership-of-store-investment-vehicles.html "Sainsbury’s pays 4 million for full ownership of store investment vehicles") unit. The future shape of the Franco-Japanese alliance has implications for both companies as well as the [global auto industry](https://www.financedigest.com/german-industry-calls-for-delay-to-global-minimum-tax-bdi.html "German industry calls for delay to global minimum tax – BDI"). It also highlights how the immense technological upheaval in the auto industry is forcing companies to both [partner and compete with a dizzying number of newcomers and tech firms](https://www.financedigest.com/exclusive-crypto-giant-binance-moved-400-million-from-u-s-partner-to-firm-managed-by-ceo-zhao.html "Exclusive-Crypto giant Binance moved 0 million from U.S. partner to firm managed by CEO Zhao"). Renault, for instance, has said it will partner with companies from [China’s Geely Automobile Holdings to semiconductor](https://www.financedigest.com/dutch-responds-to-us-china-policy-with-a-plan-to-curb-semiconductor-tech-exports.html "Dutch responds to US China policy with a plan to curb semiconductor tech exports") giant Qualcomm Inc. The French company is separately working to finalise a deal with Geely and to [bring Saudi Arabian state oil producer Aramco in as an investor](https://www.financedigest.com/worlds-best-islands-bring-holidaymakers-and-investors-flocking-to-the-philippines.html "‘World’s best islands’ bring holidaymakers and investors flocking to the Philippines") and partner to develop gasoline engines and hybrid technologies, Reuters has reported. (Reporting by Maki Shiraki and Gilles Guillaume; Additional reporting by David Dolan, Daniel Leussink and Satoshi Sugiyama in Tokyo, Rae Wee in Singapore and Sudip Kar-Gupta in Paris; Editing by Chang-Ran Kim and Jamie Freed) --- This blog is powered by Superblog. Visit https://superblog.ai to know more. ---