Nissan Motor Company and Renault said on Monday they have agreed to a major rejig of the Franco-Japanese car production partnership.
The deal will put the two carmakers on an equal footing and see the Japanese company invest in Renault’s new electric vehicle business.
The announcement came after nearly four months of intense talks that sources said were complicated by concerns about intellectual property sharing, as Renault had sought to build new tie-ups with companies outside the alliance.
The agreement – which needs to be ratified by both companies’ boards – would see Renault cut its stake in Nissan to 15% from around 43%, and transfer the 28% stake in the Japanese automaker to a French trust, Renault said.
Renault would then instruct the trustee to sell those shares, worth around $4.1 billion at current market values, if commercially reasonable for the French automaker, in a coordinated and orderly process, it added.
Nissan also said it would invest in Renault’s new battery-electric vehicle unit.
Renault shares up 25%
Since the two automakers announced they were in negotiations to restructure their alliance in early October, shares in Renault have gained almost 25%, while Nissan shares are up just 3%.
The future shape of the auto alliance has implications for both companies as well as their junior partner, Mitsubishi Motors Corp.
It also highlights how the immense technological upheaval in the auto industry is forcing companies to both partner and compete with a dizzying number of newcomers and tech firms.
Renault, for instance, has said it will partner with companies from China’s Geely Automobile Holdings to semiconductor giant Qualcomm.
The French company is separately working to finalise a deal with Geely and to bring Saudi Arabian state oil producer Aramco in as an investor and partner to develop gasoline engines and hybrid technologies.
- Reuters with additional editing by Jim Pollard