TOKYO (AP) — Nissan and Renault have changed their mutual cross-shareholdings equal at 15%, ironing out a source of conflict in the Japan-French auto alliance, both sides said Monday.
Up to now, Renault Group has held a 43.4% stake in Nissan Motor Co., potentially giving it a larger say in how the company is run. It will transfer shares equivalent to a 28.4% stake to a French trust, so it will hold a 15% stake in Nissan, just as Nissan holds 15% of the French automaker, according to the companies.
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The disparity between the holdings was a cause of friction, especially after Nissan became far more profitable than Renault.
The agreement on the change is still being finalized and needs board approvals from both companies.
The companies did not say who might be buying the shares from the French trust, or how, although it said there would be no time deadline on such a sale. Until then the voting rights would be “neutralized” for most managerial decisions, but the economic rights, such as dividends, will go to Renault, the companies said.
The top shareholder in Renault is the French government. Japanese Prime Minister Fumio Kishida met with French President Emmanuel Macron earlier this month.
The cross-national alliance, creator of the Leaf electric car and Infiniti luxury models, remains one of the world’s top auto groups. But it has had its ups and downs since it began in 1999, when Renault sent one of its executives, Carlos Ghosn, to then-struggling Nissan to lead a turnaround. Ghosn first served as Nissan’s chief executive and later its chairman before he was arrested in late 2018 on various financial misconduct charges.
The Nissan-Renault alliance, which also includes smaller Japanese automaker Mitsubishi Motor Corp., has been eager to put the Ghosn scandal behind it.
Allegations against Ghosn include underreporting income, using investment funds for personal gain and illicit use of company expenses, including overseas homes and a yacht. Ghosn said he is innocent of all charges. He jumped bail in late 2019 and is now in Lebanon, which has no extradition treaty with Japan.
The equalization of the crossholdings has been speculated about for some time.
The companies called the move “an important milestone.”
“The ambition is to strengthen the ties of the alliance and maximize value creation for all stakeholders with a three-stage approach,” said Nissan, based in the port city of Yokohama.
The agreement calls for Nissan to invest in Ampere, an electric vehicle and software company founded by Renault. The companies will also work together on marketing, vehicles and technology in Latin America, India and Europe.
The latest announcement underlines the automakers’ efforts to work together to ride out the avalanche of changes underway in a highly competitive industry. With worries growing about climate change, global markets are pushing electric vehicles and other cleaner modes of transportation.
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Yuri Kageyama is on Twitter https://twitter.com/yurikageyama
