Renault and Nissan agreed to reshape their partnership, with Nissan deciding to invest in Renault’s electric vehicle business.
Renault and Nissan revealed details of their redesigned partnership, with the Japanese automaker agreeing to buy up to 15% of Renault’s electric-vehicle business Ampere.
Mitsubishi Motors, the alliance’s junior partner, will also try investing in Ampere, the companies stated in a comment.
“Nissan’s intention is to invest up to 15 percent in Ampere, Renault Group’s EV & Software entity in Europe, with the aim to become a strategic investor.”
Nissan and Renault’s press release
The announcement came ahead of a Monday presentation in London.
The partners had already announced that under the terms of the agreement, the French automaker would decrease its stake in its Japanese partner to 15% from around 43%.
Renault will move 28.4% of Nissan’s shares to a French trust, making the two alliance partners more equal.
Renault and Nissan to reshape their partnership
The agreement aims to make the partnership more free and balanced over the next 15 years, per sources close to the situation.
The partnership will result in synergies from shared projects in Europe, India, and Latin America, as well as in Renault’s flagship EV business, electronics, and solid-state batteries.
Renault will have complete freedom to sell Nissan remaining shares in the trust.
“It has no obligation to sell the shares within a specific pre-determined period of time. Nissan would benefit from a right of first offer to it or to a designated third party.”
Nissan and Renault’s press release
The industrial projects on which Renault and Nissan will continue to collaborate could generate hundreds of millions of euros in profit over time, or even billions “if things go very, very well,” Renault CEO Luca de Meo told reporters at a press conference in London.
“So far, the relevance of these projects has been underestimated.”
Renault CEO Luca de Meo
FlexEVan, an electric van
Among the new ventures are developing and producing several new models in South America, India, and Europe, including an electric van termed FlexEVan.
The partners will also work together on EV charging and recycling in Renault’s core region.
According to a statement, a final agreement is expected by the end of the first quarter, subject to a few conditions, including regulatory approvals. The transaction is expected to close in the fourth quarter.
“It’s the first time in many years that Renault and Nissan have stopped fighting each other. Time will tell what the reshaped alliance brings, but for now, this is really good news.”
Pierre-Olivier Essig, an analyst at AIR Capital
On Monday, investors and analysts were hoping for more information about how the trust will operate.
“There is absolutely no word about what’s going to happen to those shares in the trust. It seems they are all avoiding the issue of Nissan buying them back, which I think would be the best thing for all parties involved.”
CLSA analyst Christopher Richter
Restructured alliance
Richter stated that Renault’s brand could be more assertive, so raising funds for Ampere may be difficult for the French automaker.
“I wonder how much money you’d really raise once this thing goes on the market.”
CLSA analyst Christopher Richter
The two automakers’ unequal relationship had long been a contention among Nissan executives.
Although Renault booted out Nissan two decades ago, it is the smaller carmaker in terms of sales.
The overthrow of its architect and former chairman, Carlos Ghosn, amid a financial scandal severely strained the alliance.
According to Richter of CLSA, the restructured alliance could allow Nissan and Renault to collaborate on R&D, shared costs, and a few shared products. “with a little bit less rancor and acrimony between them.”
However, Honda and General Motors have formed a partnership that includes the development of lower-cost EVs without the need for a capital relationship.
“One almost wonders what’s the point of them having any stake in either one, any stake at all.”
CLSA analyst Christopher Richter
