# Nissan seals Renault deal, now faces hard yards in China Author: Pal Sinha, Barnali Author URL: https://financedigest.com/author/pal-sinha-barnali Published: 2023-07-26 Category: NEWS Category URL: https://financedigest.com/category/news Meta Title: Nissan seals Renault deal, now faces hard yards in China Meta Description: Nissan invests $663 million in Renault's electric vehicle unit, but struggles with China's competitive car market. Details on new line-up to come. URL: https://financedigest.com/nissan-seals-renault-deal-now-faces-hard-yards-in-chinahtml ![undefined](https://prod.superblogcdn.com/site_cuid_cm5qst7v3003gwirgwqtxn8i8/images/2023-07-26t051421z2lynxmpej6p04brtroptp4nissan-renault-1736813719923-compressed.jpg) # Nissan seals Renault deal, now faces hard yards in China By Daniel Leussink and Gilles Guillaume TOKYO/PARIS (Reuters) -Nissan will invest up to $663 million in Renault’s new electric vehicle unit, the automakers said on Wednesday, as they finalised terms of their restructured partnership after months of negotiation clouded by tension. Sealing the deal is likely to be seen as a positive. Talks between the two had dragged on months longer than expected, Reuters has reported, due in part to Nissan’s concern about [protecting its intellectual property in future](https://www.financedigest.com/recent-technological-advancements-to-propel-growth-of-the-2k-protective-coatings-market-in-foreseeable-future.html "Recent Technological Advancements to Propel Growth of the 2K Protective Coatings Market in Foreseeable Future") collaborations. The agreement now frees up both companies to focus on the more pressing problem of navigating the fast-changing [industry landscape](https://www.financedigest.com/healthy-fat-free-snacks-market-2022-outlook-current-and-future-industry-landscape-analysis-2031.html "Healthy Fat-Free Snacks Market 2022 Outlook, Current and Future Industry Landscape Analysis 2031"). For Nissan, that means contending with an increasingly grim outlook for foreign automakers in China, the [world’s biggest car market](https://www.financedigest.com/world-shares-rally-as-china-offers-markets-a-hand.html "World shares rally as China offers markets a hand"). The Japanese automaker said China remained a challenge after reporting that it nearly doubled first-quarter profit, and [lifted its full-year outlook](https://www.financedigest.com/dulux-maker-akzo-nobel-lifts-outlook-on-easing-raw-material-costs.html "Dulux maker Akzo Nobel lifts outlook on easing raw material costs"), helped by a weaker yen, and better sales in Japan and North America. [CEO Makoto Uchida told a briefing he expected the earnings](https://www.financedigest.com/naturgys-profit-rises-on-lng-gains-soothing-shareholders-by-pietro-lombardi-madrid-reuters-spanish-power-utility-naturgy-reported-on-monday-an-88-jump-in-profit-for-the-first-six-months-of.html "Naturgy’s profit rises on LNG gains, soothing shareholders By Pietro Lombardi MADRID (Reuters) – Spanish power utility Naturgy reported on Monday an 88% jump in profit for the first six months of the year, boosted by strong earnings at its liquefied natural gas (LNG) business, which could help it to win over restive investors. Earlier this month, the company said it would increase its dividend floor through 2025 while trimming expected investment, as it sought to make rewarding shareholders a priority. Pleasing them has become a focus as Naturgy considers changes that could reshape the company and after arguments over the potential appointment of a chief executive. Naturgy’s first-half net profit jumped to 1.05 billion euros (.16 billion), boosted by its liquefied natural gas (LNG) business. Shares were down 0.2% in mid-morning trading, bucking deeper declines, in particular for Spain’s blue-chip banks and utilities after a general election on Sunday produced no clear winner. Renta 4 Banco analyst Angel Perez Llamazares said Naturgy performed better than expected, adding “cash flows also beat our expectation,” and debt fell more than expected. After natural gas prices hit record levels last year, Naturgy said a fall in procurement costs this year and hedging gains had boosed profits. In the first half of the year, the company “exceeded the objectives of operating efficiency, cash generation, investment materialisation and debt reduction,” Executive Chairman and CEO Francisco Reynes said. After rival Iberdrola named a separate CEO last year, Naturgy is the only large energy company in Spain to combine the roles of executive chairman and CEO. Earlier this month, the company raised the dividend floor to 1.40 euros a share, from 1.20 euros. Operating profit (earnings before interest, tax, depreciation and amortisation) is expected to reach 5.1 billion euros, compared with a previous guidance of 4.8 billion euros. It said it was targeting net profit of 1.8 billion euros in 2025. Naturgy also relaunched its plan to split regulated infrastructure operations and liberalised energy businesses into two listed companies. The project had been suspended after the Ukraine war disrupted energy markets and analysts are still sceptical. “We believe it is unlikely that Naturgy will be able to implement its asset split in the short term and it is also unlikely that a big change in the shareholding of the company would occur,” said RBC analyst Fernando Garcia. ( = 0.8986 euros) (Reporting by Pietro Lombardi, editing by Inti Landauro and Barbara Lewis)") recovery in the world’s second-largest economy to take some time, adding Nissan would give more details on a new line-up for the Chinese market by autumn. Unfortunately, our [sales outlook](https://www.financedigest.com/bottler-coca-cola-hbc-lifts-sales-outlook.html "Bottler Coca-Cola HBC lifts sales outlook") is now falling far below our production capacity,” he said of China, adding that he had he recently visited the country and held talks with joint venture partner Dongfeng Motor Group. Chinese auto brands are on track to account for just over 50% of the cars sold in their home market this year thanks to a growing dominance in [electric vehicles](https://www.financedigest.com/lithium-producers-warn-global-supplies-may-not-meet-electric-vehicle-demand.html "Lithium producers warn global supplies may not meet electric vehicle demand"), consultancy AlixPartners said this month. # AMPERE INVESTMENT Nissan said it would invest up to 600 [million euros](https://www.financedigest.com/spains-king-felipe-reveals-2-6-million-euros-in-wealth-in-bid-to-make-royal-house-more-transparent.html "Spain’s King Felipe reveals 2.6 million euros in wealth in bid to make Royal House more transparent") ($663 million) in Renault’s electric vehicle unit, Ampere. Renault, meanwhile, will lower its [stake in Nissan](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") to 15% from around 43%, putting their relationship on equal footing. The investment in Ampere is consistent with Nissan being a strategic investor and securing a board seat on the new company, Nissan said. Questioned on how many [members the board](https://www.financedigest.com/passendo-powers-up-with-raft-of-new-board-members.html "Passendo powers up with raft of new board members") will have, a Renault spokesperson replied it had not yet been fully decided. Sources have said Ampere could be valued at up to 10 [billion euros](https://www.financedigest.com/axa-unilever-to-join-new-1-billion-euro-regenerative-agriculture-fund.html "AXA, Unilever to join new 1 billion euro regenerative agriculture fund"). Nissan had flagged in February that it would invest a maximum 15% in Ampere, but the exact size of its stake remained unclear. U.S. chip giant Qualcomm has already said it will invest in Ampere, and Nissan and Renault’s junior partner, Mitsubishi Motors, has said it wants to decide about any potential investment before the [unit’s initial public offering](https://www.financedigest.com/australias-united-malt-agrees-to-1-billion-takeover-offer-from-frances-invivo.html "Australia’s United Malt agrees to billion takeover offer from France’s InVivo"), which could happen during the first half of 2024. The companies said the [overhaul was subject to regulatory approvals](https://www.financedigest.com/apple-forced-to-change-charger-in-europe-as-eu-approves-overhaul.html "Apple forced to change charger in Europe as EU approves overhaul") and completion was expected in the fourth quarter of 2023. ($1 = 0.9053 euros) (Reporting by Gilles Guillame in PARIS and Daniel Leussink in TOKYO; Editing by David Dolan and Miral Fahmy) --- This blog is powered by Superblog. Visit https://superblog.ai to know more. ---