Two members of the Renault Nissan Mitsubishi Alliance have struck a deal that would make the relationship more favorable and equitable for both parties.
Nissan and Renault have revealed details of their new framework deal that will put both companies on equal footing in their Alliance and see the Japanese marque investing in the French automaker’s new electric vehicle (EV) startup company.
The arrangement of the ownership stakes between Nissan and Renault has been a source of power struggle between the two companies. At the start of the alliance, Renault was the one who bailed out Nissan from near-bankruptcy when the French manufacturer took up 43.4% of Nissan shares. However, since then Nissan was able to make a great recovery to the point where it was making more cars than Renault. Reports state that Nissan argued they now deserved a more equivalent role in the partnership.
Upon approval by the Board, the new deal stipulates that both Nissan and Renault will possess only 15% of each other’s company. Since Renault previously owned 43.4% of Nissan, the remaining 28.4% will be transferred to a French trust “where the voting rights would be “neutralized” for most of the decisions, but the economic rights (dividends and shares’ sale proceeds) would still entirely benefit Renault until such shares are sold.” No specific timeline was indicated for the transfer of Nissan shares.
The rumors of Renault planning taking more shares in Nissan from a few years ago precipitated in a large controversy between the two automakers. Being a proudly Japanese company, Nissan's executives and board were reportedly against the idea. One of the major indicators that pundits point to is the manner in which Carlos Ghosn was ousted from his perch atop the two automakers.
This agreement is a landmark moment in the Alliance’s 24-year history as Nissan’s shares of Renault will finally come with voting rights and allows the Japanese automaker to have a stronger say in the group’s strategic plans.
Another major development sees Nissan investing in Renault EV and software company called Ampere. Financial details (including the number of shares) were not revealed. However, this opens up an opportunity for both brands to increase their cooperation in the growing market for electric vehicles.
Both companies will also work together on key projects across several locations in three different continents, Latin America, India, and Europe, concentrating on the market and vehicle and technologies.