Renault is cutting Nissan shares as the automakers overhaul their decades-old alliance

Renault and Nissan automobile logos are pictured during the Brussels Motor Show on January 9, 2020 in Brussels. (Photo by KENZO TRIBOUILLARD/AFP via Getty Images)

Kenzo Tribouillard | Afp | Good pictures

Automobile giants Renault And Nissan The companies agreed on Monday to restructure their decades-old alliance, whereby Renault will transfer a 28.4% stake in Nissan to a French trust.

Voting rights in trust will be “neutralized” for most decisions, but economic rights (dividends and sale proceeds of shares) will fully benefit Renault until such shares are sold,” Monday’s announcement said. If “commercially reasonable” and part of an “integrated and orderly process,” the Renault will instruct the trustee to sell the shares.

The deal is still subject to board approvals, but Renault’s stake in Nissan will be reduced from about 43% to 15%, reducing its interest to equal the Japanese giant’s current stake in Renault.

The companies said the two companies “will be able to freely exercise the voting rights attached to their 15% direct shareholders with a 15% limit”.

The car makers first signed their alliance in March 1999. Monday’s deal came after months of intense negotiations.

As part of the deal, Nissan will invest in Renault’s electric vehicle division Ampere, while the two companies will undertake “high value-creating operational projects” in Latin America, India and Europe.

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