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Renault Offers Concessions to Strike Nissan Deal (Bloomberg)

Published January 17, 2023

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The article below is sourced from Bloomberg Wire Service. The views and opinions expressed in this story are those of the Bloomberg Wire Service and do not necessarily reflect the official policy or position of NADA.

Renault SA is offering some concessions to Nissan Motor Co. as it tries to clinch a deal to reboot a more than two-decade alliance, according to people familiar with the situation.

Nissan’s independent board directors are due to meet early next week to consider several proposals by Renault, said the people, who asked not to be identified as the talks are private. These include reassurances to help ease Nissan’s concerns over shared intellectual property, one of the sticking points in the negotiations, the people said.

There’s also acknowledgment on Renault’s part that Nissan may invest less than hoped in the French carmaker’s EV business Ampere that it’s currently carving out, the people said. Renault sees potential for a roughly €10 billion valuation for the unit and is planning an initial public offering for the second part of the year, depending on market conditions. 

Nissan doesn’t agree with this valuation level and made no decision yet on Ampere, said the people. It may end up buying less than the originally planned 15% stake, they said.

A spokesman for Renault declined to comment. Media representatives for Nissan based in Japan didn’t immediately respond to queries for comment outside office hours.

While Renault is making last-mile efforts to clinch the deal, the concessions remain minor and the carmaker’s main focus is still execution of its strategic plan and profitability. Those efforts are paying off, with the stock up almost 75% since hitting a low on March 8, when Renault was under pressure because of a Russian business it no longer owns.

Complex Split

Renault is in the middle of a complex split of its business into five different units while negotiating with Nissan ways to rebalance an alliance with lopsided capital ties that has become a source of friction over the years. While Nissan CEO Makoto Uchida wants to move quickly with the agreement, the company’s independent directors are worried about the implications for the Japanese company from Renault’s reorganization, which has delayed the deal, several people said. 

There’s also concern over Renault’s legacy combustion-engine business partner, China’s Zhejiang Geely Holding Co., gaining access to joint technology. 

Past Pressure

The talks between the two companies and junior alliance partner Mitsubishi Motors Corp. got new impetus earlier this week when French President Emmanuel Macron met with Japan’s Prime Minister Fumio Kishida to reassure him that the French government backs Renault’s rebalancing plan and won’t seek a Renault-Nissan merger. 

Past pressure for a merger from the French government, Renault’s most powerful investor with a 15% stake, is one of the reasons relations between the two companies became fraught over the years. The rebalancing will mean Renault selling 28% of Nissan over time so that they each end up with equal, 15% holdings in the other company.

As part of the proposals currently under discussion, Nissan won’t allow sharing of its e-Power hybrid technology within Horse, an entity Renault is creating for its legacy combustion-engine assets, the people said. Horse will be an equal partnership with Geely. 

Renault Chairman Jean-Dominique Senard and Chief Executive Officer Luca de Meo are expected to attend in person the next alliance operating board meeting in Japan at the end of the month, the people said. No decisions have been yet made on when a possible non-binding agreement might be signed and planning of the various meetings could still change, the people said.

(By Albertina Torsoli with assistance from Reed Stevenson.)

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