Renault ponders reducing Nissan stake to boost Fiat merger support
According to sources close to the issue, Renault SA is contemplating reducing its 43.4% stake in Nissan Motor Co. in a move to increase support from its Japanese partner to revive its merger proposal with Fiat Chrysler Automobiles N.V.
The suggestion for the amalgamation was rejected in June after two participants sent Nissan deferred at a Renault committee conference to decide on the strategy.
The French-Japanese team has begun debates on modifications in the capital structure of the alliance and could achieve an arrangement at the latest in September, reports said Monday.
Nissan’s share in Renault is 15.0 per cent non-voting and seeks a more stable cross-shareholding framework.
Nissan sold 5.65 million automobiles globally last year, 1.5 times more than the Renault, despite Renault having greater control over Nissan.
Earlier in the year, a feud broke out between the two companies when Renault initially opposed Nissan’s governance reform plan and suggested voting against it at an annual shareholders meeting in June. Nissan granted more representation to Renault in its new supervisory committees.
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Nissan CEO Hiroto Saikawa said he intends to evaluate the partnership with Renault’s “unbalanced” capital structure.
Nissan aims to reduce the stake of Renault to 20-25%, while the French automaker is planning to hold 30-35%, the Financial Times reported on Monday.
After the partnership proposition between Renault and Fiat Chrysler crashed in June, a tiny group of senior managers from the two automakers started discussions about the framework shift.
According to The Wall Street Journal, the French automaker questioned Nissan for a published proposition on the circumstances under which the Japanese partnership member “would find an arrangement with FCA appropriate.”
Mike Manley, CEO of Fiat Chrysler, informed The Financial Times that the Italian-American carmaker was still “involved in learning” from his French competitor, incorporating a mixture of “important synergies.” Fiat Chrysler provided Renault with a suggestion for a partnership in May but withdrew it more than a week subsequently after measures by the French government, Renault’s biggest shareholder, in which he requested Renault.