Carmakers Renault and Nissan have agreed to restructure their longstanding partnership, with the French company whittling down its stake in the Japanese firm to 15%.
Under the agreement, Renault will transfer 28.4% of its shares in the Yokohama-based company into a French trust. Voting rights for that stake will be “neutralized” for most decisions, Nissan said in a statement, although Renault will continue to reap the financial benefits from the shares unless they are sold.
Renault (RNLSY) and Nissan (NSANF) will each retain a 15% stake in one another’s businesses through a cross-shareholding agreement, with voting rights. Previously, Nissan (NSANF) had held a 15% non-voting stake in the French company, while Renault (RNLSY) owned about 43% of Nissan (NSANF).
The move marks a significant milestone in the 24-year-old auto alliance.
Since 1999, both carmakers have worked in tandem, alongside junior partner Mitsubishi Motors (MSBHY). The collaboration has typically allowed the companies to share production and technology, and ultimately save billions of dollars a year.
But the group’s future was thrown into question in recent years, particularly after the stunning downfall of its former chief Carlos Ghosn in 2018.
Ghosn, who had brought the three automakers together, was arrested in Japan, where prosecutors accused him of financial crimes. He fled Japan in 2019, saying he believed he would not have been given a fair trial.
He has maintained his innocence and is currently in Lebanon, where he remains a fugitive. France, where he holds citizenship, issued an arrest warrant for him last spring.
The scandal prompted speculation that the alliance would be broken up. But in 2020, the companies dismissed such chatter.
More recently, Renault and Nissan disclosed that they were rethinking the nature of their relationship. Last October, both companies said that they were “engaged in trustful discussions” about the future of the alliance.
In its Monday statement, Nissan said the two would continue to work together on projects in Europe, India and Latin America.
The Japanese automaker will also invest in Ampere, Renault’s recently formed electric vehicle and software business, it added.