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Renault, Nissan Agree on Landmark Deal to Reshape Alliance

As part of the hard-won pact, Renault will cut its holding in Nissan to 15% from 43% to rebalance lopsided capital ties, the partners said Monday.

Renault CEO Luca de Meo, left, and Renault Chairman Jean-Dominique Senard
Renault CEO Luca de Meo, left, and Renault Chairman Jean-Dominique Senard

Renault SA and Nissan Motor Co. signed a deal aimed at easing longstanding tensions between the two companies, allowing them to move forward at a time of unparalleled challenges for the automotive industry. 

As part of the hard-won pact, Renault will cut its holding in Nissan to 15% from 43% to rebalance lopsided capital ties, the partners said Monday, resolving a cause of friction that slowed cooperation at a crucial time for carmakers globally. The agreement also includes developing and working on several new models globally. 

Nissan also intends to invest in Renault’s electric-vehicle business Ampere for as much as a 15% stake in the entity that’s being separated from Renault’s combustion-engine and powertrain operations. Alliance junior partner Mitsubishi Motors Corp. will also weigh investing in Ampere. 

The partners also agreed to continue collaborating on various industrial projects. A final pact is set to be reached by the end of the first quarter, subject to a limited number of conditions, including regulatory approvals, according to a statement. The deal is scheduled to close in the fourth quarter. 

The industrial projects Renault and Nissan will continue working together on could generate hundreds of millions of euros in profit for the companies over time, or even billions “if things go very, very well,” Chief Executive Officer Luca de Meo told reporters at a briefing in London. “The relevance of these projects has been underestimated so far.”

Renault CEO Luca de Meo, left, and Renault Chairman Jean-Dominique SenardSource: Bloomberg
Renault CEO Luca de Meo, left, and Renault Chairman Jean-Dominique SenardSource: Bloomberg

The new ventures include developing and making several new models at production sites in South America and India, as well as Europe, including an electric van dubbed FlexEVan. In Renault’s core region, the partners will also collaborate on EV charging and recycling. 

The agreement is designed to give new impetus to an almost 24-year-old partnership that nearly collapse after the 2018 downfall of its former leader Carlos Ghosn. The new alliance deal would be put in place for an initial period of 15 years.

“It’s the first time in many years that Renault and Nissan stop fighting each other,” says Pierre-Olivier Essig, an analyst at AIR Capital said ahead of the finalization of the agreement. “Time will tell what the reshaped alliance brings, but for now this is really good news.”

Renault, Nissan and junior alliance partner Mitsubishi Motors Corp. are presenting details of the agreement at a joint press conference in London on Monday.  

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