Stock Markets 12 hours ago (Oct 09, 2022 04:05AM ET)
© Reuters. FILE PHOTO: The logo of Renault carmaker is pictured at a dealership in Vertou, near Nantes, France, January 17, 2022. REUTERS/Stephane Mahe
(Reuters) -Nissan Motor Co Ltd is pressing French partner Renault SA (OTC:) to cut its stake in the Japanese automaker as much as possible, ideally to 15%, and may consider raising funds to buy back the shares, a source familiar with the matter said.
The demands were made in exchange for Nissan (OTC:) agreeing to invest in Renault (EPA:)’s new unit being set up to house its electric vehicle (EV) assets, said the source, who sought anonymity as the talks are not public.
Renault owns about 43% of Nissan, which wants its French ally to wind down the stake to 15%, drawing level with Nissan’s share in the alliance partner, the source said.
The stake sale would not affect their business alliance and Nissan may need to raise funds to buy the shares back from Renault, the source added.
A Nissan spokesperson declined to comment. Renault did not immediately reply to Reuters’ requests for comment.
The stake selldown talks were first reported by the Wall Street Journal and news agency Bloomberg said Renault was open to reducing its stake in Nissan, citing people familiar with the talks.
Renault is pushing ahead with plans to split its EV and combustion engine businesses in a bid to catch up with rivals such as Tesla (NASDAQ:) and Volkswagen (ETR:) in the race to cleaner driving.
It expects to unveil a detailed blueprint for the new EV entity at a capital markets day this autumn.
As the negotiations intensify, Renault’s Chief Executive Luca de Meo is set to attend Sunday’s Formula 1 race in Suzuka, giving him an opportunity to speak with his Nissan counterpart, Makoto Uchida, another source said.
This weekend’s talks are unlikely to yield concrete results, the first source said, but negotiations could bring a deal before Nov. 8, when de Meo plans to present an update of his strategy.
Alliance partners Nissan and Mitsubishi have not yet said whether they will take part in Renault’s future EV unit.
The source said Mitsubishi was also considering taking a single-digit percent stake in Renault’s EV unit.