Renault and Nissan in talks that could reshape auto alliance

PARIS / TOKYO, Oct 10 (Reuters) – Renault (RENA.PA) and Nissan (7201.T) said on Monday they were in talks about the future of their alliance, which also includes the Japanese automaker, a Is considering investing in a new electric vehicle venture. Its French partner.

The talks, which could signal the biggest reset in the alliance since the 2018 arrest of longtime executive Carlos Ghosn, include Renault considering selling some of Nissan’s stake, two people with their knowledge said.

Negotiations are expected to continue ahead of the Renault investor presentation in early November, when the French carmaker is expected to give an update on its new EV unit, code-named “Ampere”.

Renault owns about 43% of Nissan, which in turn has a 15% stake in its long-term partner, in which the French state also holds 15%.

Renault shares rose up to 6% in early trade, making the stock the best performer on France’s benchmark CAC-40 Equity Index (.FCHI). They were up 3.54% from 1105 GMT.

Renault and Nissan said in a joint statement that they were “engaged in fiduciary discussions around a number of initiatives” including a potential Nissan investment in the EV venture and “structural improvements” in their alliance.

Renault CEO Luca Di Meo, who was in Japan over the weekend, and Nissan CEO Makoto Uchida have been central to talks about reneging on their terms, a person familiar with the talks said.

A group of Nissan executives, including Chief Operating Officer Ashwini Gupta, have also been involved in developing discussions in recent months, the person said.

Renault is looking to win over Nissan as an investor in its new EV venture, which it is setting up with a separate combustion engine unit, essentially splitting the high-growth and investment-hungry portion of its auto business. Is.

In return for investing in the EV venture, Nissan is looking to Renault to reduce its stake in the Japanese automaker, a person familiar with the talks said.

The alliance’s French dominance has long been a point of contention for Nissan, which wants Renault to reduce its stake in Renault to 15%, a source familiar with the matter told Reuters.

For Nissan, the talks could represent a chance to reset a structure that has been seen by many executives at the Japanese firm as unbalanced, given the way vehicle development work between the two carmakers has progressed in recent years. .

One person told Reuters that Nissan may consider raising funds to buy back shares held by Renault.

Renault and Nissan declined comment beyond their statement.

Seiji Sugiura, a senior analyst at Tokai Tokyo Research Institute, said he didn’t expect Nissan to have trouble funding buybacks of that scale.

“My own guess is that Japanese investors — 60 to 40 — would prefer to operate Nissan as a separate company, or at least with a smaller stake,” Sugiura said. “If they’re going to do that, any time now can be just as good.”

Any sale of a stake in Nissan to take Renault’s stake to 15% – which would amount to $3.8 billion at the current market value – will not affect their continued collaboration, the source said.

The source said Nissan may need to raise funds to buy back shares from Renault.

Mitsubishi, another partner in the alliance, was also looking to pick up a single-digit percentage stake in Renault’s EV unit, the source said.

Earlier in the year, Nissan and Renault laid out detailed plans to invest $26 billion over the next five years in electric car development.

Nissan is set to launch its first EV Aria crossover since the US market-leading Leaf in the coming weeks. Nissan has said that its launch was delayed by about a year due to a lack of semiconductors.

Reporting by Tasillo Hummel, Gilles Guillaume, Satoshi Sugiyama and David Dolan, writing by Sylvia Alosi; Editing by Barbara Lewis, Robert Birsella

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