Renault and Nissan confirm talks over alliance future
Stock Markets 41 minutes ago (Oct 10, 2022 04:50AM ET)
© Reuters. FILE PHOTO: The logos of car manufacturers Nissan and Renault are pictured at a dealership Kyiv, Ukraine June 25, 2020. REUTERS/Valentyn Ogirenko/File Photo
PARIS (Reuters) – French carmaker Renault (EPA:) and its Japanese partner Nissan (OTC:) said they were in talks about the future of their alliance, confirming media reports over the weekend.
In their statement, the companies said Nissan was considering investing in Renault’s new electric vehicle (EV)unit, which the French car maker is setting up alongside a separate combustion engine business.
Renault shares rose by as much as 6% in early trading, making the stock the best performer on France’s benchmark CAC-40 equity index. They were up 2.2% by 0838 GMT.
A source familiar with the matter told Reuters over the weekend Nissan was pressing Renault to cut its stake in the Japanese automaker in exchange for investing in the EV unit.
The source said Nissan may consider raising funds to buy back the shares. Renault and Nissan declined to comment on this.
Renault owns about 43% of Nissan, which in turn owns 15% of its French ally. The French state also owns 15% of Renault.
The French dominance has long been a point of contention for Nissan, which wants Renault to cut its Nissan stake to 15% to draw level with its own holding in Renault, the source familiar with the matter said.
The stake sale – which at current market prices would be worth $3.8 billion – would not affect their business alliance and Nissan may need to raise funds to buy the shares back from Renault, the source added.
Renault CEO Luca De Meo was in Japan over the weekend, officially for the Formula One Grand Prix. Negotiations are expected to continue ahead of a Nov. 8 Renault investor presentation, when the company is expected to unveil its new EV unit.
The source said Mitsubishi, another partner in the alliance between Renault and Nissan, was also considering taking a single-digit percent stake in Renault’s EV unit.