French automaker Renault will slash its stake in partner Nissan as part of a deal rebalancing the rocky alliance between the two companies, the Japanese firm said Monday.
Renault will reduce its stake from 43.4 percent to 15 percent, the same size as Nissan’s stake in its French counterpart, as part of a broad agreement reshaping relations between the firms, Nissan said in a statement.
The agreement follows months of painstaking negotiations, and is expected to be signed next week following board approval from both sides.
Nissan also said it would invest in Renault’s new electric vehicle business Ampere, although the size of the stake was not announced.
The Japanese company said the new deal would “strengthen the ties of the alliance and maximize value creation for all stakeholders”.
The international auto alliance began in 1999, when Renault rescued Nissan from bankruptcy.
They were joined by Mitsubishi Motors in 2016, when Nissan took a 34 percent stake in its struggling Japanese rival.
But the union was destabilised by the 2018 arrest of Nissan boss Carlos Ghosn, who claimed the charges against him were intended to prevent him from bringing the Japanese and French automakers closer together.
Discussions have been held behind closed doors between the pair over the reshaping of their alliance, and Monday’s announcement had been widely reported in recent months as the official announcement was repeatedly delayed.
In November, Renault announced that it would split its operations in two — its new venture Ampere, and a separate subsidiary for petrol, diesel and hybrid cars that will pair up with China’s Geely.
But concerns at Nissan about future technology transfers to the Chinese carmaker, as well as details over the sharing of electric vehicle intellectual property, complicated the negotiations between the two companies.
Analysts see a rebalancing of the deal as a way to build confidence between Nissan and Renault.
There is also scope for the firms to cooperate on electric vehicles, given Nissan’s existing technologies and Renault’s greater access to the European market.
After the deal, the French automaker will not immediately sell the outstanding 28.4 percent of its Nissan shares because the current market value is lower than that registered in Renault’s accounts.
Instead, the shares will be placed in a trust for sale when prices improve.