Renault Nissan Alliance Saved for Now

Renault Nissan Alliance Saved for Now

December 11, 2015 — The Renault Nissan Alliance and the French government reportedly have agreed to terms that will restore balance of power between the two sides. The agreement, which still has to be voted on by the board, will allow Nissan to protect itself from increasing influence from the French government.

The dispute (read more here) has been ongoing for approximately eight months and threatened to create a significant rupture in the alliance. The agreements call for France backing off on some of its additional investment that gives it nearly 30% voting rights along with veto power over Nissan’s strategic decisions. Nissan will also be able to increase its investment in Renault should France break the agreement.

Nissan, meanwhile, has agreed to back off its investment plans it undertook to protect itself from interference from the French government. The move would have pushed the alliance closer to becoming a full merger between Nissan and Renault — an event the French government does not want to happen. Investors in Renault, however, were hoping for a merger to happen because they believe it would allow for more shareholder value to be generated by the two companies.

The board is scheduled to possibly vote today on the agreements.

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