The French car manufacturer Renault announced that will reduce the shareholding to 15%. of the Japanese Nissan, which it currently holds. The company will transfer the remaining shares to a French trust, a trust fund which will have the task of transferring the shares to the market.
Renault to reduce the shares of Nissan it owns to 15%
France’s Renault bought Nissan’s shares in 1999, rescuing the company from the brink of bankruptcy. Initially, Renault acquired 36.4% of the shares, to then increase the stake to 43.4%. The turn-of-the-century agreement also stipulated that Nissan took over 15% of the French company.
Now, however, Renault will transfer 28.4% of its shares to a trust, which will redistribute the shares to the market. This comes about due to the change in relative value of the two companies. In fact, Nissan has a much greater value than in the past, with Reanult having lost the market since the beginning of the millennium. The two companies therefore re-discussed the agreement for a long time, which since 2016 it also includes Mitsubishi.
Furthermore, as reported by Il Post, the creator of that agreement, Carlos Ghosn, was at the center of a complex legal case. First arrested in Japan for having underreported his fees in his reporting to the stock exchange authorities, he had fled to Lebanon after being accused of using company assets for personal gain.
Beyond the judicial issues, the change to the agreement will provide a new corporate structure that balances the mutual power of the companies involved. It is currently difficult to assess whether this could have an iimpact on operational decisions of the two brands.