Nissan and Renault Agree to Overhaul Alliance

Facts

• On Monday, Nissan Motor Co. and Renault SA agreed to restructure their two-decade-old auto manufacturing alliance to put the two companies on an equal investment footing, ending almost four months of intense negotiations.
• Under the new contract, Renault will lower its 43% stake in Nissan to 15%, transferring a 28.4% no-vote share into a French trust. Nissan, which previously held no voting rights, will now have an equal 15% voting rights share, though Renault will retain its financial profits from the trust.
• The original agreement came after Renault bailed out a failing Nissan in 1999, though the Japanese company has since sold far more vehicles than its French partner, prompting it to seek a more equal stake.
• The deal, which still needs approval from both companies' boards, was slowed over rights to intellectual property jointly created over the decades. Once finalized, Nissan will have achieved its goal of equal shareholding while Renault will get its desired investment in electric car production.
• The deal also includes raising operating profit margins to 8% by 2025 and more than 10% in 2030, compared with the 5% expected this year.
• The two manufacturers have agreed to continue working together on projects in Europe, India, and Latin America, with Nissan also agreeing to invest in Renault's recently formed electric vehicle and software business Ampere.

Sources: Reuters, CNN, New York Times, Wall Street Journal, and Forbes.

Narratives

• Narrative B, as provided by Auto News. This deal seems to strengthen the relationship between Nissan and Renault. From a shareholding perspective, Nissan is finally getting the equal footing it has long desired, and on the investment side, both parties seem eager to invest in electric vehicle technology together. This is the start of a new prosperous era of an already successful auto industry power couple.
• Narrative A, as provided by Reuters. Although this agreement gives a more fair share to Nissan and boosts investment for both parties, it doesn't solve the many differing opinions on business tactics between Yokohama and Paris. Unless they figure out some sort of joint board chairmanship, the debate over future investments will be continual, and road bumps will be unavoidable.