French automotive giant Renault Group said following the several months of constructive discussions with Japan-based automobile major Nissan Motor Co has an important milestone in its discussions on defining new foundations for their partnership.
As a part of the new arrangement, Renault and Nissan have agreed to restructure their longstanding partnership, with the French company whittling down its stake in the Japanese firm to 15%, Renault said in a statement.
“Renault Group would transfer 28.4% of Nissan shares into a French trust, where the voting rights would be “neutralised” for most of the decisions, but the economic rights (dividends and shares’ sale proceeds) would still entirely benefit to Renault Group until such shares are sold,” the French major said in a release.
Renault Group would instruct the trustee to sell the entrusted Nissan shares if commercially reasonable for Renault Group in a coordinated and orderly process, but it would have no obligation to sell the shares within a specific pre-determined period, the release said.
As per information available the development marks a significant milestone in the 24-year-old auto alliance. Both automotive companies, alongside junior partner Mitsubishi Motors, have been working in tandem since 1999. The collaboration between these auto giants has typically allowed them to share production and technology, and ultimately save billions of dollars a year.
The relation between the partners were strained following the arrest of former Renault chief Carlos Ghosn in 2018 in Japan on charges of financial crimes.
Ghosn was instrumental in bringing three automakers together and has at helm of affairs till 2018. He fled Japan in 2019, and since then investors and shares were raising questions about the alliance’s future.