Renault May Give Nissan More Clout in Alliance

Renault SA is pondering a move to restructure its alliance with Nissan Motor Co. and give the Japanese company more control over the 16-year-old equity partnership, Bloomberg News reports. But a resolution to act is not expected anytime soon.

Renault current owns 43.3% of Nissan, and Nissan owns a 15% non-voting share of Renault. Analysts tell Bloomberg too much capital is being immobilized by the current structure.

Bloomberg's sources say Renault is considering a plan that would lower the company's holding to less than 40%, thereby giving Nissan voting rights. Bloomberg says the scheme is a maneuver by Carlos Ghosn, CEO of both companies, to curb France's increasing influence over the alliance's business decisions.

The government asserted itself last spring by secretly boosting its own stake in Renault from 15.01% to 19.74%. That was enough to enable the government to prevail in a stockholder vote to accept a new French law that awards double voting rights to long-term investors. The move gave the government more influence over Renault's decisions about domestic production and employment levels.

Bloomberg notes the Renault-Nissan alliance was created when Nissan was struggling to avoid bankruptcy. Today Nissan is worth twice as much as Renault and contributes more than €1.5 billion to the French company's profits. Some analysts say the imbalance alone is enough to question the future of the alliance in its current form.