Nissan and Renault are working to revitalise their cooperation

Renault is in talks to sell its interest in the Japanese automaker.

According to a person familiar with the issue, Nissan’s independent directors have decided to proceed with an agreement to rebalance the Japanese automaker’s two-decade partnership with Renault.

Final talks are underway for Renault to reduce its stake in Nissan and for Nissan to invest in Renault’s planned electric-vehicle carveout, code-named Ampere, with the goal of concluding talks this month before making a formal announcement, according to the person, who did not want to be identified because the details are not yet public. The Yomiuri newspaper reported on the time earlier on Tuesday.

Renault is in the throes of a complicated separation of its business into five distinct entities while negotiating with Nissan how to rebalance an alliance with unequal capital linkages that has become a source of conflict over the years. Renault believes Ampere is worth €10 billion and is preparing an initial public offering for the second half of the year, depending on market circumstances.

According to the source, Nissan must now determine how much to invest in Renault’s EV division and for how much, thus leaving the valuation in the hands of the Japanese corporation. Shiro Nagai, a Nissan spokeswoman, declined to comment.

The partnership was formed two decades ago when Renault salvaged Nissan with a capital injection and sent in Carlos Ghosn to bring the manufacturer around. However, Ghosn’s 2018 arrest for suspected financial wrongdoing, as well as a lopsided ownership, has put strain on the alliance. The French automaker owns 43% of Nissan, whereas Renault owns 15% but has no voting rights.

According to the individual, the French government has convinced Nissan that it will support the rebalancing, with Renault cutting down its stock over time until they have an equal 15% ownership in each other, assuaging fears among the carmaker’s board and management.

According to persons familiar with the situation, as part of the proposals, Nissan has requested assurances that its technology would not be shared with third parties by Renault’s traditional internal combustion engine company.

Renault chair Jean-Dominique Senard and CEO Luca de Meo are set to attend the next alliance operational board meeting in Japan at the end of this month. According to the individual, this would be followed by a formal Nissan board meeting to ratify the purchase, before a public ceremony to disclose the agreement.