Renault Board Seeks to Broker a Deal for Nissan Voting Rights

A small group of Renault SA’s independent board members has been asked to broker a deal with the French government to save the company’s 16-year-old alliance with Nissan Motor Co., sources tell the Financial Times.

Nissan wants a voting stake in Renault to replace its current 15% nonvoting investment. To achieve that, Renault must reduce its own controlling 43% stake in Nissan to less than 40%.

The Renault board favors a more equitable balance that could mean a complete merger of the two companies. Last week all 10 of the board’s independent members signed a letter to the French state expressing support for Renault’s plan.

The FT says the Renault committee appears to be heading toward an ultimatum for the French government.

Renault's efforts this year to realign the alliance have been opposed by an increasingly forceful government position. In April the state hiked its stake in Renault to 19.7% from 12%. The move enabled the government to force Renault to comply with France’s new “Florange” law that in April will double voting rights for the government and other long-term investors.

Nissan fears the state’s increasing clout, which is focused on preserving jobs in France, will interfere with the alliance’s business operations. The FT notes that Nissan has become increasingly vocal about becoming “enfranchised.”

Last weekend French Prime Minister Manuel Valls told Europe 1 radio he wants the alliance to continue unchanged and without a full merger. His position has been echoed by Economy Minister Emmanuel Macron.