Renault is embarking on a significant reshaping of its alliance with Nissan, marking a pivotal moment in the history of the two automotive giants. The French carmaker has initiated the process by selling a 5% stake back to Nissan, a move that underscores a dramatic transformation in their longstanding partnership.
This transaction involves Renault divesting 211 million Nissan shares at ¥568.5 ($3.91) each, totaling a sale value of approximately €765 million ($825 million). Despite incurring a €1.5 billion ($1.61 billion) capital loss, Renault affirms that this will not affect its operational earnings.
The sale is just the initial phase in a series of planned share disposals by Renault. The broader strategy involves reducing its holding in Nissan from about 43% to 15%, aligning with the terms of their revamped alliance agreement. The timeline for the sale of the remaining shares remains uncertain. However, financial experts from Bernstein, speaking to Reuters, suggest that Nissan’s disposal of a 28% stake could bolster its cash reserves by as much as €4.2 billion ($4.5 billion) at the current market rates.
As part of this restructured alliance, Renault’s divestment will see Nissan cancel the repurchased shares, amounting to an estimated ¥119.95 billion ($824 million).
Furthering this collaboration, Renault and Nissan will each maintain a reciprocal 15% stake in one another. Significantly, Nissan’s 15% stake in Renault will transition from a non-voting to a voting stake, symbolizing a deeper integration of their partnership.
In a reciprocal move, Nissan will invest up to €600 million ($663 million) in Renault’s Ampere electric vehicle (EV) division. This investment is part of Renault’s broader strategy under the leadership of CEO Luca de Meo, who anticipates Ampere’s public debut between March and May of the following year. Initially aiming for a 2022 IPO with a targeted market capitalization of around €10 billion ($11 billion), these plans have since been deferred.
The Nissan-Renault partnership, dating back to 1999, has been a significant force in the global automotive industry. The alliance, often cited as a pioneering example of cross-cultural collaboration in the automotive sector, has navigated through various challenges, including leadership changes and market shifts. This latest development not only represents a strategic realignment but also signals a renewed commitment to adapt to the rapidly evolving automotive landscape, particularly in the realm of electric vehicles. The restructuring of their alliance positions both companies to better leverage their strengths and face future challenges in a highly competitive industry.
