After eight months of struggle over power, the two partners have reached a compromise that will supposedly balance the control of the French government within the alliance.
The agreement signed on Friday is offering Nissan guarantees against future interventions by its partner Renault or the French government – its own biggest shareholder. The struggle began in April this year, when the French government raised its Renault stake to secure double voting rights, as it wanted to be sure that it was still in control of the alliance. The move attracted a lot of criticism from its Japanese partner, especially from alliance Chief Executive Carlos Ghosn, who has headed both carmakers for the last decade, and France has tried several times to cool things down – but without results until now.
Renault board approved last week two new contracts to limit the French state’s increased weight in non-strategic shareholder votes and effectively forsake Renault’s right to control Nissan strategy. “We’ve certainly lost a bit, but Nissan has accepted that France has increased voting rights on important strategic questions,” one Renault manager said. On the other side, Nissan said it was “very pleased” with the agreement, after having earlier threatened to exit the carmakers’ 2002 alliance agreement unless a deal was reached by Friday.
The compromise gives the Japanese automaker the possibility to immediately raise its 15 percent stake in Renault. An increase to 25 percent would cancel Renault’s voting rights in Nissan under Japanese law, effectively ending French control. The deal allows Nissan to lift its Renault holding to 25 percent or beyond, only in the event of interference by Renault or by the French government that breaches the new undertakings.