Nissan May Raise Stake in Renault

Nissan Motor Co. has developed proposals to increase its 15% stake in Renault SA to as much as 35%, sources tell Reuters.

Renault currently owns 43% of Nissan in a highly successful partnership the two companies launched 16 years ago. The current arrangement gives Nissan no voting rights in the alliance.

Nissan's proposal was sparked by the French government’s secretive move in April to hike its stake in Renault from 15% to nearly 20%. The investment enabled the government to defeat an effort by the Renault board to preserve the company’s “one-share, one-vote” ownership policy.

Instead, Renault must comply with a new French law that grants double voting rights to long-term shareholders, including the government. The law, which was championed by Economy Minister Emmanuel Macron, is intended to hamper efforts by outsiders to take control of French companies. But it also enables the government to have a stronger voice in business decisions by the alliance.

The Nissan proposal, which is backed by Renault-Nissan CEO Carlos Ghosn, aims to establish better balance between the two partners. Reuters says Macron opposes the change.

When the alliance was launched, Nissan was near bankruptcy. But in recent years the Japanese company has contributed about two-thirds of the partnership’s profit.