Renault Group and Nissan Motor Co. Ltd. today announced that they have entered into the definitive agreements contemplated by the binding framework agreement announced in February 2023.

Jean-Dominique Senard, Chairman of The Alliance (Mitsubishi, Nissan, Renault), commented: “The agreements that have been signed today allow us to step into the next chapter of the Alliance. They strengthen our long-standing partnership and will maximize value creation for each Alliance member. This also lays the foundations for a new balanced, fair, and effective governance.”

Three key areas

The agreements focus on extending the Alliance collaboration in three areas: high-value-creation operational projects in India, Latin America, and Europe; enhanced strategic agility with new initiatives that partners can join; and rebalanced Renault Group-Nissan cross-shareholdings and reinforced Alliance governance.

In the first area, the partners are considering new key projects in Latin America, India, and Europe to deliver win-win, large-scale, actionable benefits. Among these, Renault Group and Nissan have already announced their renewed commitment to Indian operations through new investments and vehicles.

Ampere

In the second area of enhanced cooperation, the partners agreed to explore their existing electrification and low-emission technologies strategies by investing and collaborating in respective member-company projects.

As part of this cooperation, Nissan has confirmed its intention to become a strategic investor in Ampere, Renault Group’s new EV and software entity in Europe. Accordingly, Nissan has committed to invest up to €600 million in Ampere, consistent with being a strategic investor in Ampere and securing a board seat.

This investment opportunity aligns with Nissan’s electrification strategy, creating multiple potential benefits and synergies that complement Nissan’s own goals and initiatives in Europe and other potential markets.

Makoto Uchida, President and CEO of Nissan Motor Co. Ltd., said: “With the finalization of the definitive agreements, we have entered the next phase of collaboration with Renault and Mitsubishi Motors in mutually beneficial areas of innovations.”

“This will create additional value through initiatives aligned with Nissan’s Ambition 2030 and electrification strategy.  The investment opportunity in Ampere complements and strengthens Nissan’s ongoing electric push in Europe and will deliver numerous synergies, including cost efficiencies, regulatory compliance, and a broader range of EV products and powertrains,” Ushida added.

Rebalancing

The definitive agreements also formalize the rebalancing of the Renault Group-Nissan cross-shareholdings and the reinforcement of the governance of the Alliance. Renault Group and Nissan entered a new Alliance agreement that will replace the current agreements governing the Alliance.

As announced in February, Renault Group and Nissan will retain cross-shareholdings of 15% with lock-up and standstill obligations. Renault will transfer 28,4% of its Nissan shares into a French trust, where the entrusted shares will be voted neutrally, subject to limited exceptions.

Renault Group would continue to fully benefit from the entrusted shares’ economic rights (dividends and proceeds of share sales) until such shares are sold. The transfer to the trust would trigger no impairment in Renault Group’s financial statements.

Renault Group is not obligated to sell the shares within a specific pre-determined period. Renault Group would have complete flexibility to sell the Nissan shares held in the trust within a coordinated and orderly process with Nissan, in which Nissan would benefit from a right of first offer.

Luca de Meo, CEO of Renault Group, commented: “These agreements provide us with a solid base to reactivate business operations worldwide in key markets, with the potential to generate hundreds of millions in value for Renault, Nissan, Mitsubishi, and stakeholders.”

“They give us the strategic agility we need more than ever in today’s rapidly evolving environment. We are all engaged with the right mindset and welcome Nissan as a strong partner in our upcoming EV and Software pure player Ampere. It confirms the attractiveness of the project to be a front runner in Europe, allowing Renault and its Alliance partners to position themselves ahead of the starting grid for the EV and software race in Europe,” de Meo concluded.

More freedom

The agreement hands the partners also more freedom to pursue other projects. Renault is pooling its legacy combustion-engine assets  (Horse) with China’s Zhejiang Geely Holding and is working with Qualcomm on semiconductors.

In June, Renault also pushed back Ampere’s IPO timing following investor feedback. Nissan is not interested in Horse and is shifting to EVs and cutting costs to make more money from each car it sells. Renault in June pushed back the timing of the EV arm’s IPO following investor feedback.

Over the years, cultural differences between France and Japan led to frequent misunderstandings, and the Ghosn trial in Japan and its flight to Libanon didn’t arrange things. Later on, talks almost collapsed due to a power struggle within Nissan. They accelerated again after the departure of Nissan’s number two, Ashwani Gupta.

Renault’s de Meo has worked closely with Nissan’s Uchida to identify joint projects to rekindle the relationship. Renault and Nissan are under pressure as competition from Tesla and Chinese EV makers intensifies. This forced the partners to try to salvage a strained relationship that risked collapsing.