Nissan Announces Proposal To Wrest Power From Renault, Paris

Nissan has announced a proposal which would end Renault’s control of the Renault-Nissan Alliance, and would curtail interferance by the French government.

When we last left off, Nissan was looking to gain a voice in the alliance it made in 1999 with Renault by increasing its stake while mitigating the stake shared between Renault and Paris. The Japanese automaker has held a 15 percent non-voting stake since alliance CEO Carlos Ghosn turned around its fortunes in the early 2000s, as French law prevents affiliates owning less than 40 percent of a French-led company from voting at the shareholders’ table.

Nissan has other ideas.

The stipulations would become a problem in the following decade as Nissan outgrew Renault in sales while also leading in engineering and other fields. The widening gulf has since led to an ongoing standoff since April 2015 between Nissan and Paris after economy minister Emmanuel Macron used a new voting rights law — meant to strengthen voting power of shareholders holding long-term stakes in a given company — to boost Paris’ ownership in Renault from 15 percent to 19.7 percent, securing the government’s standing in the overall alliance.

Reuters reports Nissan’s new proposal would seek limits to voting rights held by the government, along with written guarantees no intervention in Nissan’s operations from Renault — such as selecting the Japanese automaker’s top three executives — would occur.

Were these provisions be violated, however, Nissan would then buy as many shares as it wanted in Renault, and dissolve the alliance.

Renault’s board is set to respond to the proposal December 11. Negotiations between Nissan and Paris continue in the meantime, both sides seeking a compromise to the conflict over governance.