Nissan and Renault announced the total remake of the long-lasting relationship last month.
Japanese automobile manufacturer Nissan and French multinational automobile producer Renault have revealed the details of their redesigned alliance. Per the agreement, the Japanese are buying up to 15% stake in Renault’s EV unit Ampere. At the same time, the alliance’s junior partner Mitsubishi Motors will also consider investing in the EV arm. Meanwhile, Renault plans to list the electric vehicle unit.
Details of the Nissan-Renault Redesigned Alliance
According to a statement by the companies, Nissan aims to become a strategic investor with its investment in Renault under the redesigned alliance. The duo announced that the French manufacturer would reduce its stake in Nissan from about 43% to 15%. Renault plans to transfer 28.4% of its Nissan shares into a French Trust, making the two companies equal partners in the redesigned alliance. Also, Nissan will have access to sell its Nissan shares in the Trust. However, the statement stated that “it has no obligation to sell the shares within a specific predetermined period of time.” When the shares are sold, “Nissan would benefit from a right of first offer, to its or the benefit of a designated third party.”
People familiar with the redesigned alliance between Nissan and Renault revealed that the latest agreement is to balance the partnership over the next 15 years. The joint venture will create synergies in India, Europe, and Latin America. Also, both companies will work together to support Renault’s flagship electric vehicle business, electronics, and solid-state batteries.
Nissan and Renault announced the total remake of the long-lasting relationship last month. The announcement came after almost four months of deep conversations on intellectual properties. There were concerns about the sharing of intellectual properties as the French company settled its entanglement with other companies outside the partnership.
Analyst Weighs in on Reshaped Partnership
Analysts and investors are concerned with the plans to keep its Nissan stake in a Trust. CLSA analyst Christopher Richter said:
“There’s absolutely no word about what’s going to happen to those shares in the trust. It seems they’re all avoiding the issue of Nissan buying them back which I think would be the best thing for all parties involved.”
He added that the Renault brand is not perceived as strong in the market, which may hinder the French company from generating money for the EV business.
“I wonder once this thing goes into the market how much money you would really raise. That;s why I think they’re going to push Nissan to pay too much.”
Coinspeaker reported last month that Renault and Nissan were planning to restructure their relationship, which has been existing since 1999. Also, the new agreement allows each party to “freely exercise the voting rights attached to their 15% direct shareholdings, with a 15% cap.”
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Source: https://www.coinspeaker.com/nissan-stake-renault-ev-redesigned-alliance/