(Update: details on Nissan’s voting rights at Renault, stock market price and next “Capital Market Day” of the French manufacturer)
PARIS/TOKYO (Agefi-Dow Jones)–Automakers Renault and Nissan are struggling to strike a deal that would reshape their alliance with Mitsubishi, with intellectual property one of the sticking points, officials said. people familiar with the matter at the Wall Street Journal.
So far, talks between Renault and Nissan have led to an agreement under which the French automaker would sell part of its 43% stake in the capital of the Japanese automaker, reducing it to 15%. The Nissan shares to be sold by Renault would be placed in an independent financial trust and then later sold at a predetermined price, the sources said.
In exchange, Nissan would support Renault’s “Renaulution” plan by investing in its new entity dedicated to electric vehicles. The diamond group is preparing to create two separate divisions within the company to manage the eventual abandonment of thermal vehicles: one that would focus on electric vehicles and software, “Ampere”, and another for its traditional business of combustion engines and hybrids, “Horse”.
Renault and Nissan hoped to be able to reach a non-binding preliminary agreement to redesign their alliance at the end of October, but several sticking points have delayed the conclusion of such an agreement, sources at the two manufacturers said.
The issue of voting rights
According to several people familiar with the matter, the way in which the intellectual property jointly developed by Nissan and Renault would be transferred to “Ampere” constitutes a major sticking point.
In addition, Nissan does not want the technology it developed with Renault to be shared with Chinese auto giant Zhejiang Geely Holding Group, which plans to take a stake in “Horse”, the people added.
Renault, Nissan and the French state are also in the process of negotiating the type of voting rights which the Japanese manufacturer will benefit from with its tricolor counterpart after the conclusion of their agreement. The “Florange” law of March 29, 2014 provides that shareholders of listed companies who have held their shares for at least two years benefit from double voting rights.
Present in the capital of Renault for more than ten years, Nissan cannot however benefit from the voting rights attached to these shares because the French group is its largest shareholder with more than 40% of the shares, pursuant to the provisions of article L. 233–31 of the Commercial Code. If Renault’s stake in Nissan fell below the 40% threshold, the Japanese group could vote at its partner’s general meetings.
However, Renault and the French government want to cap Nissan’s voting rights at 15%, according to informed sources. The “French clan” believes this would put the two automakers on an equal footing, with each holding 15% of the other’s voting rights, they added.
November will be crucial
Renault and Nissan plan to review and vote on their deal in mid-November, when leaders of the two automakers meet in Japan. The two engines of the Alliance had indicated at the beginning of October that they were discussing new initiatives intended to strengthen “cooperation and the future” of their alliance, which is more than two decades old. Partners reported exploring a set of common strategic initiatives across markets, products and technologies.
On Monday, Nissan shares closed up 2.8% on the Tokyo Stock Exchange, at 474 yen, while Renault shares fell 1.8% in Paris around 3:00 p.m., to 30.75 euros.
Renault will hold a “Capital Market Day” on November 8. On this occasion, its managing director, Luca de Meo, and Thierry Piéton, its financial director, will present an update of the group’s strategy and the medium-term financial objectives of the Renaulution strategic plan.
“All eyes are on this event”, indicated Oddo BHF in a recent note. Investors will particularly watch for comments from Renault about the rebalancing of its alliance with Japanese automakers Nissan and Mitsubishi, according to the financial intermediary.
-Nick Kostov, River Davis and Sean McLain, The Wall Street Journal
(French version and contribution Dimitri Delmond) ed: VLV – ECH
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October 31, 2022 10:15 ET (14:15 GMT)