Renault, Nissan directors set to approve alliance deal with hours to spare

Renault and Nissan’s boards are set to approve a landmark deal to reshape their troubled two-decade alliance just hours before an official event unveiling more details of the plan, according to people familiar with the situation.

Renault directors are gathering Sunday followed by Nissan’s board early on Monday, Feb. 6, said the people, who asked not to be identified discussing information that has not been made public. Both boards are expected to agree to the proposals, according to the people.

Renault and Nissan this week outlined their in-principle agreement on a deal to rebalance cross-capital ties and cooperation on future projects with a goal of resetting their alliance that also includes junior partner Mitsubishi Motors.

The votes will come shortly before executives from the three companies hold a media conference in London on Feb. 6 to share more about their plans, with final details on timing and venue being ironed out, the people said.

A Nissan spokeswoman said the company did not have further comment beyond this week’s release. A spokesman for Renault declined to comment.

Strained talks

The votes follow months of strained talks aimed at adjusting a relationship that has been long been troubled, culminating in the 2018 arrest of the alliance’s former leader Carlos Ghosn.

“Talks procrastination only reflects once again the level of misunderstanding and probably the respective ‘fed up’ between the two groups,” Stifel analyst Pierre-Yves Quemener said.

“The only risk today would be a distraction of Renault’s management currently embroiled in never-ending ‘low-level’ or ‘last minute’ demands from their (former) Japanese ‘partner’.”

The deal will see Renault reduce its stake in Nissan from 43 percent to 15 percent, a rebalancing of lopsided capital ties that fomented resentment at the Japanese automaker for years.

Nissan is also set to invest in Renault’s electric-vehicle and software business Ampere, which the French automaker wants to list in a Paris initial public offering later this year.

The companies are betting that the revised alliance will help them better tackle major challenges that are reshaping the automotive industry, including a costly shift to electrification and the rise of automation.

This includes Renault working with new partners, including China’s Zhejiang Geely Holding Group and Qualcomm.

There are likely to be no details released at the Feb. 6 press conference on the size of the stake Nissan will take in Ampere nor on how much it’s willing to invest in the business, according to the people familiar.

Renault aims for an IPO of Ampere in the second half of the year, depending on market conditions, the people said. It’s targeting a valuation of roughly 10 billion euros, Bloomberg has reported.

Negotiations risked collapsing late last year due to intellectual property concerns on common technology Renault wants to share with other parties, as well as on Ampere’s valuation.

Nissan’s independent directors endorsed Renault’s proposals after a drawn-out meeting on Jan. 16. They reviewed the contracts once more in detail on Tuesday, and are expected to vote in favor of the plan, the people said.

Royalties will be paid to Nissan for shared technology as part of a solution to the IP issues, the people said.

Renault, Nissan and Mitsubishi plan to move forward via collaboration on specific projects encompassing vehicles and technologies in India, South America and Europe, the alliance confirmed in a statement earlier this week.