After more than a year of discussion, Renault and Nissan will align aspects of their cross-shareholding Alliance agreement, to strengthen the partnership in a changing environment.
Alliance Change takes a three-tiered approach involving collaborative operational projects across key markets, new strategic initiatives such as EV investment and renewed governance structures that reduce inequality.
The main outcome revealed in the plan for the renewed Alliance is a change in corporate shares, with Nissan and Renault Group having the same 15 percent cross-holding.
This is a clear change from the previous position, where Renault Group held almost 44 percent of Nissan shares, while Nissan only held 15 percent of Renault Group shares.
The 15 percent stake will come with a lock-up and cease-and-desist obligation for both parties, which limits how and when either party can sell the company’s shares.
Additionally, both parties will have voting rights attached to their shares, as opposed to the current deal where Nissan’s shares have no voting rights attached, a clear point of contention in the previously one-sided deal.
To achieve the same 15 percent stake, Groupe Renault will have to reduce its stake in Nissan by 28.4 percent, which it will do by transferring the shares into a French trust, meaning it will retain the economic rights of the shares but voting rights will be ‘neutralized’.
The proposed French trust would be instructed by Groupe Renault to sell its Nissan stake if it was ‘commercially viable’, but it would not be obliged to do so in accordance with a specific time frame.
As Nissan has become far more profitable since the Alliance’s inception, it appears Groupe Renault is protecting the economic value of its shares while moving forward with a more balanced deal to appease stakeholders.
A joint press release from the two automakers detailed the ‘high value creation operational projects’ that will form part of the newly balanced Alliance.
The automaker has been tight-lipped about the details of the projects, revealing only that they will be “used along three dimensions: market, vehicle and technology,” and will be launched in Latin America, India and Europe.
The new agreement also details that Nissan will invest in Ampere, the EV venture founded by the Renault Group, with the ambition of becoming a strategic stakeholder in the company.
Ampere is Renault’s EV wing that will develop, manufacture and sell electric passenger cars, with a line-up of six Renault-badged EVs scheduled by 2030.
Nissan’s investment in Ampere will allow Nissan, and its partner Mitsubishi Motors, to use the hardware and software technology in its future EV models.
The new basis of the Alliance is subject to approval from the boards of directors of Renault Group and Nissan, and once finalized will be announced immediately.
Speculative disputes include disagreements over intellectual property rights, and a breakdown in trust and communication after former Alliance chief Carlos Ghosn was arrested for financial misconduct in 2018.
If approved, the renewal would be the first major change to the Alliance since its inception in 1999, when Renault rescued Nissan by taking a controlling stake during a period of financial struggle.
The carmaker said that the changes were proposed with the ambition to “strengthen Alliance relationships and maximize value creation for all stakeholders”.
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