Renault Holds Key to Nissan’s Future
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As iPhone maker Foxconn circles the ailing Japanese automaker Nissan Motor Co., Renault SA will play a decisive role in any deal that’s struck.
The French carmaker is Nissan’s biggest shareholder with a 36% stake — a holding that Hon Hai Precision Industry Co. on Feb. 12 signaled it’s open to buying. The Taiwanese manufacturer that’s expanded into electric vehicles is moving in as Nissan and Honda Motor Co. consider ending their tie-up talks.
Renault declined to comment. Nissan and Honda are scheduled to report results on Feb. 13, giving the companies an opportunity to update investors on the state of their talks or other possible partners. The French carmaker has in the past said its goal is to reduce its Nissan stake to 15%.
Still, Renault won’t give up its holding without seeking a premium from whoever gains control over its longtime alliance partner, Bloomberg reported in late January. In a meeting in Japan last month, Renault representatives voiced their concern over how a possible deal between Nissan and Honda would be structured.
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Once considered the alliance’s weak link, Renault leapfrogged Nissan in market value in April of last year as investors rewarded it for accelerating the development of new models, returning to profit and inking new partnerships with technology companies such as Qualcomm Inc.
The company’s Nissan shareholding is a holdover from its long-standing alliance that includes Mitsubishi Motors Corp. The two companies partially unwound their 25-year strategic partnership amid mounting rivalries and mutual suspicion.
The looser ties opened up the possibility of alternative partnerships even as Renault and Nissan continue to work together on joint vehicle projects in India and Latin America.
