Why Nissan wants to lower its stake in Renault
What's the story
Nissan CEO Ivan Espinosa has announced plans to reduce the company's stake in French partner Renault. The decision comes as part of a broader strategy between the two automakers, who had previously agreed to lower their minimum required stake in each other from 15% to 10%. The revised agreement also includes provisions for coordinated share sales and a right of first refusal.
Vehicle development
How will Nissan use the funds from stake sale?
The potential sale of a 5% stake in Renault could generate approximately ¥100 billion ($640 million) at current share prices. This money would be used by Nissan to fund new vehicle development, especially considering the challenging business conditions it is currently facing. As per LSEG data, Nissan holds a 15% stake in the French company.
Strategic alignment
Renault CEO's announces departure
The news of Nissan's stake reduction comes as Renault's CEO Luca de Meo announced his departure from the company for a role outside the auto industry. Espinosa said in an interview, "We are bringing down our cross-shareholdings in order to invest in vehicles." The move is part of a larger trend of both companies gradually loosening their over two-decade-long ties.
Ownership
Renault also holds a stake in Nissan
Renault also holds a stake in Nissan, which is currently held in a French trust. This stake has been gradually sold since 2023, when the two companies restructured their alliance to give Nissan more equal footing. The restructuring was part of a broader strategy to strengthen their partnership and adapt to changing market conditions.