Renault and Nissan automobile logos are pictured through the Brussels Motor Show on January 9, 2020 in Brussels. (Photo by KENZO TRIBOUILLARD/AFP via Getty Images)
Kenzo Tribouillard | Afp | Getty Images
Automobile giants Renault and Nissan on Monday agreed to restructure their decades-long alliance, in a move that may see Renault’s shareholdings in Nissan reduced from around 43% to fifteen%.
The deal, which still pends board approvals, would equalize the businesses’ cross-shareholdings, with the carmakers now capable of “freely exercise the voting rights attached to their 15% direct shareholdings, with a 15% cap,” the businesses said.
The brand new structure would also see Renault transfer 28.4% of Nissan shares right into a French trust.
Voting rights within the trust can be “‘neutralized’ for many of the selections, however the economic rights (dividends and shares’ sale proceeds) would still entirely profit to Renault until such shares are sold,” in keeping with the Monday announcement.
Renault would instruct the trustee to sell those shares if “commercially reasonable” and as a part of a “coordinated and orderly process.”
The carmakers first signed their coalition in March 1999, expanding it to incorporate junior partner Mitsubishi Motors in 2016. The Monday deal comes after months of intense discussions over the restructure of the Franco-Japanese alliance.
As a part of the agreement, Nissan would also spend money on Ampere, Renault’s electric vehicle arm, while the 2 firms will embark on “high-value-creation operational projects” in Latin America, India and Europe.
Renault announced in November that it had signed a non-binding framework agreement with China’s Geely to ascertain a recent company producing hybrid powertrains and “highly efficient ICE [internal combustion engine] powertrains.”
The French giant has also entered right into a long-term strategic cooperation with U.S. chipmaker Qualcomm.
Renault shares dropped 1.4% in early trade in Europe, while Nissan shares were down by around 0.7% during Asian trading hours overnight.
