New Renault-Nissan Deal Is the Apex of a Process Triggered by Ghosn's Arrest

On November 19, 2018, Carlos Ghosn arrived at the Tokyo airport in his private jet and was immediately arrested. He was trying to create a more solid deal than the alliance he forged between Renault and Nissan. On January 30, 2023, the two companies announced a new organization in which Renault ceases to have as much influence as it had with the Japanese carmaker. This is the apex of the process that Ghosn's arrest triggered.
Renault will get rid of 28.4% of its Nissan shares to bring balance to the Alliance 7 photos
Photo: Renault
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The former executive repeats to anyone who asks that his arrest was a plot to prevent what he was trying to do. Ghosn was the main link between Nissan, Renault, and Mitsubishi. Should he step down for any reason, the Alliance would be in jeopardy. At the same time, a merger would face intense resistance from the Japanese government because the French government controls Renault. In other words, there was more at stake than just business – or so the people involved thought. Ghosn was trying to find a way to make the Alliance resist, creating one of the largest car companies in the world.

After his arrest, Nissan told Renault it wanted a more balanced Alliance. In other words, it wanted Renault to have the same proportion of Nissan shares as the Japanese carmaker had in the French company. Currently, Renault has 43.4% of Nissan’s shares, while the Japanese automaker has 15% of its alliance partner.

The new arrangement will see Renault getting rid of shares representing 28.4% of its Nissan stake in a curious solution. Renault will transfer these shares to a French trust and benefit from the economic rights derived from them. In other words, dividends and any money obtained with the share sales would go to Renault. The trust’s leading tasks are to prevent a massive dump in Nissan shares and also remove Renault’s power over the Japanese carmaker derived from its ownership of 43.5% of its shares.

The alternative to the French trust would be for Nissan to repurchase those shares right away. The fact that it didn’t do it shows the Japanese automaker probably does not have all the money required to pull that off. There’s no mention of who can purchase the stock from the trustee, but we’d bet Nissan to be its leading customer. What the companies disclosed is that there is no deadline for these shares to be sold. In other words, Nissan can take its time to buy them back.

Nissan’s quid pro quo is to invest in Ampere, Renault’s electric vehicle and software division. The Japanese company would become a “strategic shareholder,” but neither of the automakers clarified what that is supposed to mean. In the end, Nissan got back its independence. But Ghosn sees it another way: in September 2021, he said it was again the “boring, mediocre car company” he saved from bankruptcy in 2000.
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About the author: Gustavo Henrique Ruffo
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Motoring writer since 1998, Gustavo wants to write relevant stories about cars and their shift to a sustainable future.
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