Renault Ready to Push for Reduced Stake in Nissan?

Renault SA aims this week to finalize a board proposal that would shrink the company’s stake in Nissan Motor Co. and loosen its control over their 16-year-old alliance, sources tell Reuters.

Any such plan will put the company in direct conflict with the French government, its largest shareholder with a 19.7% stake, which continues to demand no change in the partnership’s structure.

The state has offered to limit its own voting rights to strategic issues. But Nissan is pressing the government to further pledge never to interfere with the Japanese company’s management or operations. Nissan also wants an agreement that will allow it to hike its stake in Renault from the current 15% if the vow is broken.

Nissan has no voting power in the alliance as currently structured. But control over the partnership’s management decisions hasn’t been a problem, because Carlos Ghosn is CEO of both companies. The balance shifted last spring when the French government secretly hiked its 15% stake in a maneuver that will give it a controlling minority vote in Renault’s affairs beginning in March.

Renault currently holds a controlling 43% stake in Nissan. Both companies have floated suggestions to give Nissan more clout in the alliance, since it currently contributes most of the partnership’s revenue and profits. But to date Economy Minister Emmanuel Macron has said the state won't accept any "unravelling or weakening of the links" between the two companies.