A source close to the negotiations said Tuesday that Nissan and Renault are reaching a “historic” rebalancing of their auto alliance, with a deal likely to be unveiled in the coming weeks.
The Japanese and French titans have been grappling with a restructuring of their alliance for months, with discussions involving a reduction of Renault’s massive 43.7% share in Nissan.
The two companies merged in 1999, and Mitsubishi Motors later joined them, but the combination has been difficult in recent years.
The anonymous source stated that Nissan’s independent directors had “given their approval” to a deal, opening the way for a “historic” agreement.
Motor Technology Enhancement Programme is collaborating with Nissan.
The source noted that the final details are expected to be sorted out during a meeting in Japan on January 26, followed by the signature and announcement the following week.
A Nissan spokesperson declined to comment on “speculation,” although Japan’s Yomiuri Shimbun daily stated the merger was nearing completion, and Jiji news agency reported Renault’s CEO will be in Japan this weekend.
Renault is anticipated to lower its investment in Nissan to 15%, mirroring Nissan’s stake in its French partner.
Nissan is also set to participate in Renault’s new electric vehicle firm, Ampere, although the value of the investment is still unknown.
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If an agreement is reached, it will mark the beginning of a new chapter in a relationship that began in 1999 when Renault saved Nissan from bankruptcy.
The 2018 arrest of Nissan CEO Carlos Ghosn destabilized the partnership, as he felt the allegations against him were intended to prevent him from bringing the Japanese and French automakers closer together.
In 2016, when Nissan acquired a 34% share in its struggling Japanese rival, Mitsubishi Motors joined the alliance.
Analysts saw a rebalancing of the arrangement as a means of boosting Nissan and Renault’s confidence.
Additionally, EV technology and automobiles are nearly ready for the South African market.
Given Nissan’s current technologies and Renault’s superior market access in Europe, there is also room for the companies to collaborate on electric vehicles.
The French automaker is not likely to sell the remaining 28 percent of its Nissan shares immediately after the transaction because the current market value is less than the amount recorded in Renault’s books.
The shares will instead be placed in a trust for sale when market conditions improve.
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