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After months of negotiations, Nissan Renault's restructuring of the alliance is finally coming to an end. On February 6th, Renault and Nissan announced that they had formally reached a framework agreement for alliance restructuring, with the two companies holding 15% of each other's shares and voting rights respectively.

Under the restructuring agreement, Renault's stake in Nissan fell to 15 per cent from 43.4 per cent, having previously owned 43.4 per cent of Nissan and 15 per cent of Nissan, which Renault had an advantage. After the adjustment of Renault's shareholding ratio, the equal proportion of capital contribution will make the two sides in a more equal position. In addition, both parties are free to exercise the voting rights related to 15 per cent of the direct shareholding, while Renault transfers 28.4 per cent of Nissan's shares to a French trust company, which has the right of priority.

It is understood that the new alliance agreement will last for 15 years, but Renault CEO said it has no plans to sell Nissan shares immediately. It is reported that the final agreement will be completed by the end of the first quarter of this year, and the deal will be completed in the fourth quarter. At the same time, the two companies also announced that the Renault-Nissan-Mitsubishi alliance plans to jointly launch new cooperation projects in Latin America, India and Europe, when a number of new cars will be launched.

Renault, Nissan and Mitsubishi are established car companies in France and Japan respectively, and the tripartite alliance has a history of many years. In 1999, Renault formed an alliance with Nissan, and in May of the same year, Renault bought a 36.8 per cent stake in Nissan for $5.4 billion and won the right to increase its stake to 44.4 per cent five years later. This alliance opportunity arises because Nissan was mired in a debt crisis in 1998. At first, both Ford and Daimler were interested in buying Nissan, but they were unable to make a final decision, and Nissan eventually turned to Renault for help. Since then, the two sides have been engaged in alliance cooperation.

In 2000, Renault put forward a "Nissan recovery plan" and led Nissan to turn losses into profits. In 2003, Nissan and Dongfeng established Dongfeng Motor Co., Ltd. to officially enter the Chinese market, and Nissan acquired a 15% stake in Renault in the same year. At this point, Renault has a 44.4% stake with voting rights, while Nissan owns only 15% of Renault. No voting rights. Due to the unequal equity relationship between the two sides, Renault can affect the relevant operations of Nissan, while Nissan's impact on Renault is almost negligible, resulting in cracks in the relationship between the two sides. Nissan began to object to the unequal investment relationship between the two sides.

In 2016, Nissan acquired a 34% stake in Mitsubishi Motors, and Mitsubishi Group became a member of the Renault-Nissan alliance, which formed the Renault-Nissan-Mitsubishi alliance. Among the three relationships, Renault is the majority shareholder of Nissan, Nissan is the majority shareholder of Mitsubishi, and Nissan CEO Ghosn is the soul of the alliance. Under his leadership, the Renault-Nissan-Mitsubishi alliance became the world's largest manufacturer in 2017 with a total sales of 10.61 million vehicles, but in less than two years, the relationship between the three also appeared cracks.

The trilateral alliance began to deteriorate when Nissan CEO Ghosn was arrested on suspicion of financial irregularities in November 2018. Before Mr Ghosn's accident, Renault-Nissan-Mitsubishi alliance sales of 5.538 million vehicles in the first half of 2018, the world's largest carmaker, fell 5.6 per cent to 10.1552 million in 2019 after Mr Ghosn's arrest. In May 2020, the Renault-Nissan-Mitsubishi Alliance reorganized its global layout, each with its own markets of important concern, with Nissan focusing on China, North America and Japan, Renault Group focusing on Europe, Russia, South America and North Africa, and Mitsubishi focusing on Southeast Asia and Oceania.

Ghosn, former chairman of Nissan

For Nissan Renault to restart the alliance, the two sides said that the restructuring will strengthen the 24-year cooperative relationship between the two sides. The industry said that after this restructuring, Nissan's operational independence will be improved to a certain extent. Renault is willing to make concessions on shareholding not only to ease the long-strained investment relationship between the two sides, but also to accelerate the process of car electrification in Europe.

In February 2022, Renault announced the spin-off of the electric vehicle and internal combustion engine business into separate divisions, with the spin-off fuel vehicle business to be named Horse and headquartered outside France. It is reported that without new investors, Renault will strike a 50:50 equity deal with Geely. In addition, the electric vehicle business, which will be named Ampere, is headquartered in France and plans to launch IPO in the second half of the year. In November of the same year, Renault, which is determined to accelerate the transformation of its business, issued an announcement, including Geely Holdings, Geely Motor and Renaults.a.s. Sign a non-binding framework agreement proposing the establishment of a joint venture company in which Geely and Renault will each own 50 per cent of the new company. However, Nissan has repeatedly opposed the cooperation between Renault and Geely because it does not want to drain its own technology.

This time Nissan and Renault re-enter into a reciprocal shareholding relationship, or a way to rebuild mutual trust. Under the new alliance agreement, Nissan will launch new small electric cars based on Renault's CMF-BEV pure electric platform, and Renault's planned 2026 electric van, the FlexEVan, will also be shared with Nissan. In addition, Renault and Nissan are considering working together to build charging facilities in Europe. To restart the alliance, Renault CEO Luca de Mayo said that this cooperation will bring hundreds of millions or even billions of euros to both sides.

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