Nissan and Renault Agree on Alliance Shake-Up

Nissan is a Japanese automaker that produces a wide range of vehicles, from small cars to large trucks. The company has a long history, dating back to the early 20th century. Today, Nissan is one of the largest automakers in the world, with a strong presence in both developed and emerging markets.
‍

Motor Co. and its French partner, Renault SA, have announced plans to jointly develop a new line of electric vehicles. The two companies have been working together for many years, and this new venture is a natural extension of their existing partnership. The new vehicles will be based on Renault's existing electric platform, and the two companies will share development costs and risks.
‍

Renault and Nissan have agreed to reorganize their alliance, more than two decades old. Under the new agreement, Renault will reduce its stake in Nissan.
‍

The Japanese auto maker and its French partner have reached a deal that gives the Japanese company more control over its management, while the French company gets an investment in its electric-vehicle business. The amount of the investment wasn’t disclosed.
‍

Under the terms of the agreement, Renault will eventually reduce its 43% stake in Nissan to 15%, to match the stake Nissan holds in Renault. The agreement requires approval from the boards of both companies.
‍

Nissan and Renault executives have been working for months to finalize a deal. The companies said their goal is to "strengthen the ties of the alliance and maximize value creation for all stakeholders."
‍

Nissan and Renault had initially hoped to announce the restructuring as early as November, but snags emerged. One issue was the treatment of intellectual property jointly developed by the companies over the past two decades. According to sources familiar with the matter, Nissan was pushing for a greater share of the valuable technology.
‍

The companies have made progress in their discussions recently. Earlier this month, Nissan's independent directors signaled their support for a deal, according to people familiar with the matter. The Wall Street Journal reported the outlines of the deal last week.
‍

The companies said that to reduce its Nissan stake to 15%, Renault would transfer the excess shares into a French trust. Voting rights tied to those shares would be neutralized for most decisions, but dividends and other proceeds will continue to go to Renault until the shares are sold, the companies said. The trustee designated by Renault to sell Nissan shares will do so “if commercially reasonable for Renault,” with no obligation to sell within a specific period, the companies said.
‍

Under French law, Nissan hasn't been able to vote its longstanding 15% stake in the French company because Renault holds a greater than 40% stake in Nissan. The deal announced Monday means Nissan will now be able to vote its Renault shares, although the companies said the Japanese car maker's voting rights would be capped at 15%.
‍

Assuming approval from the companies' boards, a formal announcement of the deal is slated for Feb. 6, according to people familiar with the companies' plans.
‍

The companies said they plan to work on joint projects in Latin America, India and Europe.