Japanese car maker Nissan (7201.T) will buy a stake of up to 15% in Renault’s (RENA.PA) electric vehicle (EV) unit Ampere, the pair said on Monday, in a reboot of a long and sometimes contentious alliance that will also create more common car platforms.
The agreement, which came after months of tense talks, includes the previously announced reduction of Renault’s stake in Nissan to put the two on a more equal footing, extending for an initial period of 15 years a partnership that has been in place since 1999 and also includes Mitsubishi Motors (7211.T).
“Previously the alliance was more about synergies… and global volumes,” Nissan chief operating officer Ashwani Gupta told Reuters. “The next 15 years is about how we become the number one value creator for each other and our shareholders.”
The lopsided relationship between the two car makers, which was deeply strained by the 2018 arrest of its architect and former chairman, Carlos Ghosn, amid financial scandal, had long been a source of friction among Nissan executives.
While Renault bailed out Nissan two decades ago, it is the smaller automaker by sales.
“I consider that what we have agreed is a much better set-up than what we have had in the last past few years,” Renault CEO Luca de Meo told a presentation of the new-look alliance in London.
“We have now a new governance scheme that is much more straightforward, we can now operate like a normal company. Seen from Renault, (it) is about regaining some strategic agility without breaking necessarily the ties and the synergies that were existing.”
The size of Nissan’s investment or even a firm commitment to put money into the EV unit, Renault’s flagship business which is due to be listed on the market, has so far been unclear.
“We regard Ampere as an enabler for Nissan to participate in new business opportunities in Europe,” Nissan chief executive Makoto Uchida told reporters and analysts.
No financial details were disclosed regarding the valuation of the business, with de Meo saying the market would decide. Some sources have indicated it could be worth up to 10 billion euros.
Mitsubishi CEO Takao Kato said Ampere will also form part of its European EV strategy and the company would “further study” its share participation.
Renault will reduce its stake in Nissan to 15% from around 43% by transferring a 28% stake into a French trust.
The French carmaker will have flexibility to sell the Nissan shares held in the trust but “it has no obligation to sell the shares within a specific pre-determined period of time,” the statement on Monday said.
De Meo said Renault will act in “good faith” and sell off its Nissan shares in “an orderly manner”. When it does sell, Nissan will have a right of first offer.
The companies detailed planned joint projects in Europe, India and Latin America, and will work together in the EV business, electronics and solid-state batteries.
Renault’s shares were down around 0.7% by 1225 GMT.
The sweeping remake of the 24-year old alliance gets underway after talks were dragged out by concerns over the sharing of intellectual property as Renault sought tie-ups with companies outside the partnership, including China’s Geely.
Renault’s board approved the deal on Sunday night, according to a source. Nissan’s board also approved it early on Monday, the source said.
CLSA analyst Christopher Richter said the revamped alliance could enable Nissan and Renault to work together a little more harmoniously, but he noted that Honda (7267.T) and General Motors (GM.N) have built a partnership that includes jointly developing lower-cost EVs together without any need for a capital relationship.
He added that as Renault’s brand is not seen a strong one, it could be tough for it to raise a lot of money for Ampere from the market.
“That’s why I think they’re going to push Nissan to pay too much.”