Renault will reduce its stake in Nissan while they review their alliance | CNN Business

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CNN
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Carmakers Renault and Nissan have agreed to restructure their longstanding partnership, with the French company reducing its stake in the Japanese firm to 15%.

Under the deal, Renault will transfer 28.4% of its shares in the Yokohama-based company to a French trust. Voting rights for that stake will be “neutralized” for most decisions, Nissan said in a statement, though Renault will continue to reap the financial benefits of the shares unless they are sold.

Renault (RNLSY) and Nissan (NSANF) will each hold a 15% stake in each other’s businesses through a cross-ownership agreement, with voting rights. Previously, Nissan (NSANF) held a 15% non-voting stake in the French company, while Renault (RNLSY) owned around 43% of Nissan (NSANF).

The move marks a significant milestone in the 24-year automotive alliance.

Since 1999, both automakers have worked together, along with junior partner Mitsubishi Motors (MSBHY). Collaboration has typically allowed companies to share production and technology, ultimately saving billions of dollars a year.

But the group’s future has been thrown into doubt in recent years, particularly after the shocking downfall of its former boss Carlos Ghosn. in 2018.

Ghosn, who had brought the three automakers together, was arrested in Japan, where prosecutors charged him with financial crimes. He fled Japan in 2019, saying he believed he would not have been given a fair trial.

He He has maintained his innocence and is currently in Lebanon, where he still fugitive. France, where he is a citizen, issued a warrant for his arrest last spring.

The scandal sparked speculation that the alliance would break up. But in 2020, companies have dismissed such talk.

More recently, Renault and Nissan revealed that they were reconsidering the nature of their relationship. Last October, both companies said they were “engaged in confidential discussions” about the future of the alliance.

In its statement on Monday, Nissan said the two would continue to work together on projects in Europe, India and Latin America.

The Japanese automaker will also invest in Ampere, Renault’s newly formed electric vehicle and software business, it added.