Renault-Nissan: the French State gives guarantees to the big bang of the alliance

Posted on Jan 10, 2023, 1:11 PM

The prospect of an agreement between Renault and Nissan finally seems to have come true, and the idea of ​​an announcement at the end of January is still starting to be mentioned, in Paris but also in Yokohama. After months of intense negotiations, Renault and Nissan are clarifying the fundamentals of their new alliance, and are now making sure that no political maneuvering will interfere with the management change. If a rebound is never excluded from this baroque alliance, “there won’t be any major blockage”, confesses a close friend of the file. “It’s just a matter of assuring the various players that the two governments are on board”.

According to our information, Emmanuel Macron explained on Monday night to the Japanese Prime Minister Fumio Kishida, who was at the Elysee Palace to prepare for the next G7 summit scheduled for Hiroshima, that the French executive is fully which supported the structural reorganization of the alliance. two manufacturers. He assured the head of the Japanese government that the state, which owns 15% of Renault, would not oppose the major rebalancing of cross-shareholdings that the two companies had been discussing for months.

A letter from Bruno Le Maire

Renault is ready to reduce its voting rights in Nissan from 43% to 15% and place an equivalent 28% stake in a trust over several years so that its Japanese partner’s shares are not bought up by a competitor or a fund. . Long campaigned for this “rebalancing” which is very loaded in a symbolic way, the Japanese manufacturer will also be given voting rights to the 15% it holds in Renault and which it has now been deprived of.

According to two sources, Paris’ support for this major change was confirmed by Bruno Le Maire, the Minister of Economy, who sent a detailed letter to his Japanese counterparts at METI. If Tokyo, which no longer considers Nissan a national “jewel”, does not necessarily require a written guarantee, some Nissan executives have been hoping for some weeks to get some form of guarantee from France.

Bad memories on the Japanese side

They retain a very bitter memory of the activation in 2015 of the law of Florange by a certain Emmanuel Macron. When he was still Minister of the Economy under the leadership of François Hollande, Emmanuel Macron traumatized the management of Nissan, and even Carlos Ghosn, by ordering everyone to raise the French State in the capital of Renault to ensure a double vote.

The initiative has chilled the headquarters of the Japanese manufacturer. And the trauma was revived in 2002, when Nissan was asked to take 15% of Renault… before discovering that it would not benefit from the corresponding voting rights. Since then, mistrust of French political power remains strong in Nissan’s ranks, and Monday’s top-level meeting of the two states aims to ease it.

In order to get the Japanese manufacturer’s approval faster, Renault has also in recent weeks relaxed its requirements on the contours of its future subsidiary Ampere, which focuses on electric vehicles and software. Nissan had, last year, validated a 15% stake in this entity but was reluctant to let this new company use its technological patents.

The two companies’ intellectual property lawyers struggled to define a complex legal framework to protect these various patents, to the chagrin of Losange, which initially thought it could announce an agreement when November, after December. “Renault has finally indicated that it will let Nissan choose the patents it intends to associate with Ampere”, sighs an executive involved in the negotiations.

Diamond chooses to accelerate

Similarly, Renault will not set a specific amount on its partner’s participation in the subsidiary, advance a source. For Losange, these points do not compromise the important operational benefits it aims to gain from an alliance overhaul. And even better if it allows you to accelerate by letting Nissan paint a picture to its advantage. In the fall, Renault management made a major rebalancing of the alliance’s capital conditional on Nissan’s support for its Ampere project and the implementation of new joint projects.

By removing these last blockages on the part of Ampere, Renault chose to speed up the talks in order to launch without too much delay its other Horse subsidiary, created, this, in equal part of the Chinese manufacturer Geely, to develop new thermal engines and hybrids. Nissan, which never planned to invest in this structure, will not share its e-Power hybrid technology.

In this home stretch, the chairman of the board of directors of Renault Jean-Dominique Senard took over from Luca de Meo to lead the discussions. The Italian leader’s irritation has crescendoed in the face of difficulties to finish in recent weeks.

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