Nissan seeks to break free of Renault control
30 October 2015
Japan's Nissan Motor has drawn up proposals to end control by Renault by purchasing a larger stake in its French parent amid an escalating power struggle between Renault-Nissan alliance boss Carlos Ghosn and the French state, Renault's biggest shareholder, according to a Reuters report.
In a three-page document passed to the French government, the Japanese carmaker calls for deep changes to the 16-year-old alliance, giving the companies equal weight in joint decisions and "better balanced" cross-shareholdings of 25-35 per cent, government and company sources said.
Renault currently holds 43.4 per cent of Nissan and the casting vote in their Dutch-registered Renault-Nissan BV management structure. Nissan in turn owns a non-voting 15 per cent of Renault.
The Nissan demands are a response by 61-year-old Ghosn, CEO of both car makers, to a surprise April move in which economy minister Emmanuel Macron raised Renault's stake from 15 to 19.7 per cent - informing Ghosn in a phone call only hours before the transaction took effect.
The stand-off marks a new low in Ghosn's relationship with the French government. It also threatens the future of an automotive pairing hailed as a rare success story in an industry whose recent past is littered with failed mergers.
France's stake increase, described as temporary, allowed the government to force a permanent doubling of its voting rights through the company's shareholder meeting by blocking Ghosn's proposed opt out from a new law entering force next year.
A retaliatory plan to hand more power to Nissan - by restoring its voting rights in Renault to counter the government's increased clout - already has the Renault board's support. French state representatives abstained from the 16 April vote and have since contested its legitimacy, sources said.
But the new Nissan proposals, in a 3 September note initialled by Ghosn's second-in-command Hiroto Saikawa, go much further.
Under French and Japanese law, the proposed 25-35 per cent cross-shareholdings would allow Nissan to vote as Renault's biggest shareholder while depriving the French carmaker of any reciprocal say at Nissan meetings.
That amounts to a "reversal of the balance of power within the alliance to the detriment of Renault", according to a French government source.
Responding to a Reuters report, Macron told reporters, "We want to maintain the balance of this alliance. (Renault-Nissan) must not be destabilised by governance changes or adjustments that could also lead to conflicts of interest."
The government has privately criticised Renault board members for backing measures it says would undermine the company, also highlighting Ghosn's divided CEO responsibilities.
"I'm not worried," Ghosn said at a media event in Tokyo ahead of this week's autoshow, declining to comment on the Nissan proposals. "We've faced challenges in the past but we've overcome them."