Renault and Nissan: reboot or divorce?

Renault and Nissan have opened talks on the idea of Renault reducing its 43% stake in its Japanese partner.

Carlos Ghosn of Nissan © Getty Images

In an attempt to salvage the "fraying alliance" between Renault and Nissan, the two carmakers have opened talks on the idea of Renault reducing its 43% stake in its Japanese partner, says the Financial Times. The arrangement has been "a source of tension" for the two, especially as the latter "holds only a 15% non-voting stake in Renault". The size of the cut is yet to be agreed Nissan is thought to be aiming for 20%-25%, while the French carmaker is thinking 30%-35%.

About time too, say Jacky Wong and Stephen Wilmot in The Wall Street Journal. While Renault has been "reluctant" to cut its stake, such a move could help "reboot" the relationship with Nissan, which in turn would allow it to restart deal talks with Fiat Chrysler, which were vetoed by a French government "worried that Nissan wasn't completely on board". Also, the move "would free up capital for Renault, potentially helping to negotiate more favourable terms with Fiat Chrysler". Indeed, Renault's shareholders have already reacted positively shares rose as soon as the news came out.

This isn't a reboot of the relationship more the first stages of a divorce, says Bloomberg's David Fickling. Internal Nissan emails imply that Nissan's ultimate goal is to cut Renault's stake to around 5%-10%. This suggests the Japanese company is only interested in maintaining the "appearance of an alliance" rather than substantive ties. The "writing is on the wall" for any further integration, or any of the "ambitious activities", such as the development of modular designs, that were pushed under former CEO Carlos Ghosn (pictured).

Recommended

Stockmarkets shrug off turbulence
Stockmarkets

Stockmarkets shrug off turbulence

Stockmarkets have hit their first bout of turbulence of the year, but most are clinging onto January’s gains.
4 Feb 2021
The FTSE 100 has clawed back above 7,000 – how much higher can it go?
UK stockmarkets

The FTSE 100 has clawed back above 7,000 – how much higher can it go?

The FTSE 100 index has risen to over 7,000 for the first time in over a year – it now sits just above where it was in 1999. But its era of neglect cou…
19 Apr 2021
The MoneyWeek Podcast: how to not lose money to inflation and financial repression
Investment strategy

The MoneyWeek Podcast: how to not lose money to inflation and financial repression

Merryn talks to Peter Spiller of the Capital Gearing Trust about how he navigated the last extraordinary year; what he's buying now; and how he plans …
16 Apr 2021
UK mid-cap stocks look forward to life after lockdown
UK stockmarkets

UK mid-cap stocks look forward to life after lockdown

The FTSE 250 hit an all-time high at the end of last week, as investors look to a post-lockdown recovery.
16 Apr 2021

Most Popular

Lab-grown meat: how “moo’s law” will drive innovation
Soft commodities

Lab-grown meat: how “moo’s law” will drive innovation

Jim Mellon and Anthony Chow, co-founders of Aim-listed Agronomics, explain why they believe that “cellular agriculture” will benefit from massive long…
16 Apr 2021
The bitcoin bubble will burst: here’s how to play it
Bitcoin

The bitcoin bubble will burst: here’s how to play it

The cryptocurrency’s price has soared far beyond its fundamentals, says Matthew Partridge. Here, he looks at how to short bitcoin.
12 Apr 2021
Lab-grown meat: the new agricultural revolution
Soft commodities

Lab-grown meat: the new agricultural revolution

Vegan alternatives are taking off, but the future of food technology lies in lab-grown meat – cultivating steaks and burgers from animal cells, says A…
16 Apr 2021