# Renault and Nissan in talks that could reshape autos alliance Author: Pal Sinha, Barnali Author URL: https://financedigest.com/author/pal-sinha-barnali Published: 2022-10-10 Category: NEWS Category URL: https://financedigest.com/category/news Meta Title: Renault and Nissan in Talks Over Alliance Future Meta Description: Renault and Nissan are discussing the future of their alliance and a potential investment by Nissan in Renault's new electric vehicle venture. Talks URL: https://financedigest.com/renault-and-nissan-in-talks-that-could-reshape-autos-alliancehtml ![undefined](https://prod.superblogcdn.com/site_cuid_cm5qst7v3003gwirgwqtxn8i8/images/2022-10-10t111329z4lynxmpei990aqrtroptp4renault-nissan-india-workers-1736815065144-compressed.jpg) By Gilles Guillaume and Satoshi Sugiyama PARIS/TOKYO (Reuters) -Renault and Nissan said on Monday they were in talks about the future of their alliance, including the Japanese automaker considering investing in a new electric vehicle venture by its French partner. The talks, which could prompt the biggest reset in the alliance since the 2018 arrest of longtime executive Carlos Ghosn, have included consideration of Renault selling some of its Nissan stake, two people with knowledge of them said. Negotiations are [expected to continue ahead of a Renault investor](https://www.financedigest.com/wave-of-lawsuits-over-ftx-expected-but-investors-will-face-legal-hurdles.html "‘Wave’ of lawsuits over FTX expected, but investors will face legal hurdles") presentation in early November, when the French carmaker is expected to give an update on its new EV unit, which is code-named “Ampere. Renault owns about 43% of Nissan, which in turn has a 15% [stake in its long-term partner](https://www.financedigest.com/kkr-sells-50-stake-in-spains-x-elio-to-partner-brookfield.html "KKR sells 50% stake in Spain’s X-elio to partner Brookfield"), in which the French state also has a 15% holding. [Shares in Renault rose by as much as 6% in early trading](https://www.financedigest.com/russian-central-bank-gives-legal-entities-green-light-to-trade-foreign-shares.html "Russian central bank gives legal entities green light to trade foreign shares"), making the stock the best performer on France’s benchmark CAC-40 equity index. They were up 3.54% by 1105 GMT. Renault and Nissan said in a joint statement that they were “engaged in trustful discussions around several initiatives” including a potential Nissan investment in the EV venture and what they [called “structural improvements”](https://www.financedigest.com/german-regulator-calls-on-allianz-to-improve-controls-source.html "German regulator calls on Allianz to improve controls – source") in their alliance. Renault CEO Luca De Meo, who was in Japan over the weekend, and [Nissan CEO Makoto Uchida have been central to talks about reshaping](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") its terms, a person familiar with the talks said. A group of Nissan executives, including [Chief Operating Officer](https://www.financedigest.com/iris-software-group-names-matt-tuson-as-chief-revenue-officer.html "IRIS Software Group names Matt Tuson as Chief Revenue Officer") Ashwani Gupta, have also been involved in developing discussions in recent months, the person said. [Renault is looking to win 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") as an investor in its new EV venture, which it is setting up alongside a separate combustion engine unit, essentially splitting out the higher-growth and investment-hungry portion of its auto business. In exchange for investing in the EV venture, [Nissan is looking to Renault](https://www.financedigest.com/nissan-and-renault-agree-to-overhaul-alliance-this-time-as-equals.html "Nissan and Renault agree to overhaul alliance, this time as equals") to reduce its stake in the Japanese automaker, a person familiar with the talks said. The French dominance of the alliance has long been a point of contention for Nissan, which wants Renault to [cut its stake](https://www.financedigest.com/sap-to-cut-3000-jobs-explore-qualtrics-stake-sale.html "SAP to cut 3,000 jobs, explore Qualtrics stake sale") to 15% to draw level with its own holding in Renault, the source familiar with the matter told Reuters. For Nissan, the [talks could represent a chance to reset a structure that many executives at the Japanese firm](https://www.financedigest.com/top-north-east-financial-adviser-firm-talks-corporation-tax.html "Top North East financial adviser firm talks corporation tax") have seen as unbalanced, given the way vehicle development work between the two carmakers has progressed in recent years. Nissan may [consider raising funds to buy back](https://www.financedigest.com/3-options-to-consider-when-you-owe-the-irs-back-taxes.html "3 Options to Consider When You Owe The IRS Back Taxes") the shares held by Renault, one person told Reuters. [Renault and 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") declined comment beyond their statement. Seiji Sugiura, a senior analyst at Tokai Tokyo Research Institute, said he did not expect Nissan would have [trouble financing](https://www.financedigest.com/trouble-in-paradise-the-great-procurement-and-finance-disconnect.html "Trouble in paradise: the great procurement and finance disconnect") a buyback on that scale. My own guess is that Japanese investors – by something like 60-to-40 – would rather have Nissan operating more as a [separate company](https://www.financedigest.com/why-it-pays-for-companies-to-hold-physical-assets-in-separate-limited-companies.html "Why it pays for companies to hold physical assets in separate limited companies"), or at least with a lower stake,” Sugiura said. “If they’re going to do this, now could be as good a time as any.” Any sale of a stake in Nissan to take Renault’s holding to 15% – which at current market prices would be [worth $3.8 billion](https://www.financedigest.com/why-a-quiet-revolution-in-the-cloud-is-worth-billions.html "Why A Quiet Revolution In The Cloud Is Worth Billions") – would not affect their continued cooperation, the source said. Nissan may need to raise funds to [buy the shares back](https://www.financedigest.com/uks-bellway-to-buy-back-shares-hike-social-housing-output.html "UK’s Bellway to buy back shares, hike social housing output") from Renault, the source added. The source said Mitsubishi, another partner in the alliance, was also [considering taking a single-digit percent stake in Renault’s](https://www.financedigest.com/renault-considers-making-mass-market-evs-in-india-sources.html "Renault considers making mass-market EVs in India -sources") EV unit. At the beginning of the year, Nissan and Renault detailed [plans to invest $26 billion over the next five years](https://www.financedigest.com/3-factors-to-plan-for-in-2017-a-year-like-none-other.html "3 Factors to Plan for in 2017, A Year Like None Other") in electric car development. Nissan is set to launch the Ariya crossover, its first EV since the pioneering Leaf, in the U.S. [market in coming](https://www.financedigest.com/constructive-digitization-to-let-the-remote-patient-monitoring-services-market-come-of-age.html "Constructive digitization to let the Remote Patient Monitoring Services Market come of age") weeks. Its launch was [delayed by about a year because of shortages](https://www.financedigest.com/eu-commission-approves-delay-in-medical-devices-law-to-avert-shortages.html "EU commission approves delay in medical devices law to avert shortages") of semiconductors, Nissan has said. (Reporting by Tassilo Hummel, Gilles Guillaume, Satoshi Sugiyama and David Dolan, writing by Silvia Aloisi;Editing by Barbara Lewis, Robert Birsel) --- This blog is powered by Superblog. Visit https://superblog.ai to know more. ---