Renault-Nissan Reaches Deal with France, Ending Power Struggle
14 December 2015 - Automotive News
Renault has reached agreements with Nissan and the French government to end an eight-month dispute over increased state influence on the carmaking alliance.
The new agreements will cap France's voting rights between 17.9 % and 20 % in non-strategic Renault shareholder decisions, the company said in a statement issued after a five-hour board meeting today.
The deal includes providing for non-interference in Nissan’s governance by Renault, the statement said.
Renault has a controlling 43.4 % stake in Nissan while Nissan has a 15 % non-voting stake in Renault. Nissan has been pushing to activate voting rights in its French partner.
Tension has been building since April, when France's Economy Minister Emmanuel Macron temporarily raised the government's Renault stake to nearly 20 % from 15 % without informing Renault-Nissan CEO Carlos Ghosn in advance.
Macron's move was made to secure a permanent increase in its voting rights - and enough weight to veto strategic decisions or tie-ups that might one day endanger domestic interests including jobs.
Under the new agreements France’s voting rights in Renault will generally be capped at 17.9 %, with the power rising to 20 % in the event of high attendance at the annual shareholders’ meeting. The board agreed Nissan will continue to have no vote.
The French government will maintain its double voting rights as of next April when the so-called Florange law, which grants more say to long-term investors, comes into effect. The cap will apply to votes on the dividend, appointment or dismissals of state representatives to the board, an increase in another shareholder’s stake to above 15 % and some other “exceptional circumstances,” Renault said.
Nissan was rescued by Renault in 1999 but the Japanese automaker has outgrown its French parent and now leads the way in engineering and other key areas.