After a long negotiation, Nissan Motor is finally on an equal footing with Renault in their alliance. The latter has agreed to significantly reduce its stake in the Japanese automaker. In return, Nissan will invest in Renault's new EV business, Ampere.
The duo confirmed the decision on January 30. According to Nikkei Asia, Nissan said it has reached an important milestone in defining new foundations for the partnership with Renault.
Renault currently holds 43.3% of Nissan's share and voting rights, while Nissan, which produces more cars, possesses a 15% stake in its French partner without voting rights. The imbalance originates from Renault's move to rescue Nissan from falling apart in 1999.
Renault recently agreed to lower its stake in Nissan to 15%, and will transfer the rest to a French trust for sale in the future. The decision still needs to be approved by the boards of the two automakers. An official announcement about the alliance restructuring has been tentatively scheduled on February 6 in London.
According to Bloomberg Intelligence, the sale of Nissan's stake can potentially bring Renault EUR4 billion (US$4.36 billion). It would be a significant support to move forward with Ampere - Renault's EV business - which is expected to have the IPO in the second half of 2023. Qualcomm has also said it will invest in Ampere.
Nissan aims to become a strategic shareholder of Ampere. Bloomberg reported that the Japanese automaker may seek 15% of Ampere's share with an investment between US$500 - $750 million. While the partnership will be restructured, collaboration among the Renault-Nissan-Mitsubishi alliance will continue.
Nissan targets more than 50% of global electrified vehicle sales by 2030 with 23 models. According to Tatsuo Yoshida, a Bloomberg Intelligence analyst, the deal between Nissan and Renault will enhance the former's position in the partnership and allows more management freedom.
He added that the investment in Ampere will improve Nissan's financials while the carmaker must manage risks regarding protecting proprietary knowledge.
The intellectual property jointly developed by Nissan and Renault over the years had been the major sticking point hindering the duo's negotiation. Nissan was worried that a third party will access the intellectual property as Renault planned to split its business.
According to Nikkei Asia, to help reach a consensus on both sides, Renault proposed to restrict Ampere's use of some of the properties. A similar restriction will also apply to an internal combustion engine business that Renault will establish with China-based automaker Geely.