The operational council of the Alliance meets this Thursday morning. It should ratify the agreement reached last week between Renault and Nissan on the rebalancing of their coupling. The end of a series of several months, with multiple twists.
This Thursday, the leaders of Renault, Nissan and Mitsubishi will not meet around the table for their traditional and monthly operational council. The meeting will take place by videoconference. “We don’t need to make the trip to Japan,” we explain at Renault, “everything is going well, we will save ourselves an express round trip”.
This videoconference should make it possible to ratify the final technical details of the agreement reached last week between the two manufacturers. It will then be submitted to the boards of directors of Renault and Nissan. The agreement should be officially signed in the coming days, probably in early February, but the date has not yet been decided. “You have to match the constraints of each person’s schedules as well as the regulatory constraints”, specifies one at Renault. If Jean-Dominique Senard and Luca de Meo will not make the trip to Japan this Thursday, Renault’s operational teams are there to “finalize the files”.
Discussions unblocked last week
Negotiations, which have lasted for several months between Renault and Nissan, were unblocked last week. Nissan’s independent directors, reputed to be anti-alliance, finally gave their go to a restructuring of the Alliance. This consists of a rebalancing of the cross-shareholdings of the two manufacturers. Renault will only hold 15% of Nissan’s capital, compared to 43% today, the same level that Nissan holds in Renault. The two companies will each have voting rights on the other’s board of directors, which was not the case before and generated a lot of frustration on both sides.
Discussions have long stumbled over intellectual property issues, Nissan fearing to share its patents with Renault’s new partners. The French manufacturer indeed announced last November the creation of two new entities, a thermal “Horse”, with the Chinese manufacturer Geely as a shareholder, the other 100% electric “Ampère”, which will include the American giant Qualcomm in its capital.
These technical questions settled, it is undoubtedly the policy which has finished convincing the most fervent detractors of the Alliance at Nissan. Emmanuel Macron received Japanese Prime Minister Fumio Kishida last week and assured him that the French state supported the agreement. At the same time, Bruno Le Maire wrote to his colleagues at METI, the Japanese Ministry of the Economy, guaranteeing them that the State was going to act on the rebalancing of holdings and that above all, it would not change.
“Having a written record was important for Nissan”, we slip at Renault.
Questions still pending
One question, however, has not been decided and will probably not be before the signing of the agreement: that of Nissan’s stake in Ampère. The Japanese manufacturer will enter the capital of Renault’s 100% electric entity, but the amount of its participation has not yet been decided.
“Nissan estimates that Ampère is not worth 10 billion euros in valuation as Renault calculates,” explains an expert on the Alliance.
The Japanese manufacturer, as mentioned for a time, will therefore not take 15% of the capital of Ampère, which would be equivalent to putting 1.5 billion euros on the table. “Nissan can’t afford to pay so much,” the same source continues.
The looming agreement between Renault and Nissan is therefore still full of questions. “The most important thing for Renault is that Nissan is part of the Ampère adventure, determining the amount of their participation is important but this is not blocking”, assures one on the side of the French manufacturer. This last point left open, and which will have to be settled before the introduction of Ampère in the fall of 2023, makes some observers doubt the case. “Renault gave in on almost everything, he had no hand in the negotiations. Luca de Meo, the group’s general manager, wanted to move quickly to reorganize the company, he found himself in a weak position”, judges always this connoisseur of the alliance.
“Not really a choice”
Who from Renault or Nissan won the fight? The answer is not self-evident. The two companies are now each a small thumb in the automotive world. The Renault brand, for example, sold just over 1.4 million cars in 2022, when Tesla is around 1.3 million.
“Nissan and Renault didn’t really have a choice, concludes our Alliance expert. They need each other to survive and stay in the race.”
