Renault discussing Nissan pact, in snub to France


Renault SA is considering plans to restructure its alliance with Nissan Motor Co., including giving its Japanese partner more power to contain the growing influence of the French government, people familiar with the matter said. Renault is proposing options, including cutting its stake in Nissan to trigger its voting rights, said the people, who asked not to be named because the talks are private. A resolution by the board, which met Tuesday, isn’t expected soon, as the government isn’t in favor of the move, the people said. Representatives for Renault, Nissan and the government declined to comment. Carlos Ghosn, who’s chairman and chief executive officer of both automakers, is seeking to make the alliance more balanced. The 16-year-old partnership is secured by Ghosn’s dual roles and cross-shareholdings that favor Renault. The French carmaker owns 43.4% of Nissan, which in turn holds 15% of Renault. The Japanese company, however, doesn’t have voting rights because the French manufacturer is considered the controlling partner. Those rights could be revived if Renault’s stake falls to less than 40%, the people said. The situation highlights the conflict between Ghosn and the government that arose five months ago after the state increased its stake in Renault to 19.74% from 15.01% without informing the carmaker in advance. The move was meant to boost France’s power at one of the country’s key manufacturers by pushing through a loyalty-shareholder program, which doubled the voting rights of investors who’ve held stock for more than two years. The alliance’s structure was created when Nissan was on the verge of bankruptcy. But the Japanese carmaker has since become more profitable than Renault, contributing $1.75 billion (AED6.42 billion) to its partner’s bottom line last year. Yokohama-based Nissan’s also worth twice as much as Renault, raising questions about the viability of the tie-up’s structure even before France’s move. (Mathieu Rosemain and Helene Fouquet/Bloomberg)

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