Nissan to buy up to 15% stake in Renault EV unit under reshaped alliance

[February 06, 2023]  By Gilles Guillaume and Nick Carey

LONDON (Reuters) -Nissan and Renault on Monday unveiled details of their redesigned alliance, with the Japanese car maker committing to buy a stake of up to 15% in Renault's electric vehicles unit Ampere.

The agreement, which also includes the previously announced reduction of Renault's stake in Nissan to make the two more equal partners, aims to make the alliance freer and more balanced for the next 15 years, Renault's CEO Luca de Meo said.

The lopsided relationship between the two car makers, which was deeply strained by the 2018 arrest of its architect and former chairman, Carlos Ghosn, amid financial scandal, had long been a source of friction among Nissan executives.

While Renault bailed out Nissan two decades ago, it is the smaller automaker by sales.

"I consider that what we have agreed is a much better set-up than what we have had in the last past few years," de Meo told a presentation of the new-look alliance in London.

"We have now a new governance scheme that is much more straightforward, we can now operate like a normal company. Seen from Renault, (it) is about regaining some strategic agility without breaking necessarily the ties and the synergies that were existing."

The size of Nissan's investment or even a firm commitment to put money in the EV unit, Renault's flagship business which is due to be listed on the market, has so far been unclear.

No financial details were disclosed on the valuation of the business on Monday, which some sources have indicated could be up to 10 billion euros. De Meo said the market would decide the value of the unit.

Executives from Nissan and Mitsubishi said Ampere could help grow their business in Europe.

"We regard Ampere as an enabler for Nissan to participate in new business opportunities in Europe," Nissan chief executive Makoto Uchida told reporters and analysts.

Mitsubishi CEO Takao Kato said Ampere will also form part of its European EV strategy and the company would "further study" its share participation in the unit.

A Nissan logo is seen in a vehicle during the press day at the Los Angeles Auto Show in Los Angeles, California, U.S. November 17, 2022. REUTERS/Mike Blake

Nissan and Renault had already announced that the French carmaker would reduce its stake in Nissan to 15% from around 43% by transferring a 28% stake into a French trust.

Renault will have flexibility to sell the Nissan shares held in the trust but "it has no obligation to sell the shares within a specific pre-determined period of time," the statement on Monday said.

De Meo said on Monday Renault will act in "good faith" and sell off its Nissan shares in "an orderly manner".

When it does sell, Nissan will have a right of first offer.

The companies also aim for synergies from joint projects in Europe, India and Latin America, and will work together in the EV business, electronics and solid-state batteries.

Renault's shares were down around 1% by 1009 GMT.

The sweeping remake of the 24-year old alliance comes after months of intense talks complicated by concerns about the sharing of intellectual property as Renault sought tie-ups with companies outside the partnership, including China's Geely.

Renault's board approved the deal on Sunday night, according to a source. Nissan's board also approved it early on Monday, the source said.

CLSA analyst Christopher Richter said Renault's brand is not seen as a strong one, so it may be tough for the French carmaker to raise a lot of money for Ampere.

"I wonder once this thing goes into the market how much money you would really raise, he said. "That's why I think they're going to push Nissan to pay too much."

Although Richter said the revamped alliance could enable Nissan and Renault to work together a little more harmoniously, he noted that Honda and General Motors have built a partnership that includes jointly developing lower-cost EVs together without any need for a capital relationship.

(Writing by Nick Carey and Silvia Aloisi; Editing by Kirsten Donovan)

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