Nissan, Renault Reach Deal to Resolve Corporate-Governance Dispute, Sources Say -- 2nd Update
June 19 2019 - 1:16PM
Dow Jones News
By Sean McLain in Tokyo and Nick Kostov in Paris
Nissan Motor Co. and Renault SA have resolved a standoff over
corporate governance at the Japanese car maker, according to people
familiar with their talks, easing tensions that had scuttled the
French car maker's merger talks with Fiat Chrysler Automobiles
NV.
The detente allows Nissan to install a new board, a step that
Renault executives see as clearing a path for the possible
resumption of merger talks with Fiat Chrysler, according to a
person close to Renault. Those discussions foundered after Nissan
withheld its support for a tie-up, and the French government asked
for a delay until Nissan was on board. At that point, Fiat pulled
its offer.
Renault executives would like to revive the talks in the near
future before market conditions change, this person said.
French President Emmanuel Macron is expected to discuss the
Renault-Nissan alliance when he meets with Japanese Prime Minister
Shinzo Abe next week.
The corporate governance issue has been a highly technical, but
high-profile, standoff between Nissan and Renault. It revolves
around whether Renault Chief Executive Thierry Bolloré should be
given a post on a proposed audit committee for Nissan's board.
Renault threatened to abstain in a vote on governance changes at
Nissan, effectively thwarting them, unless it got its way. That
prompted Nissan Chief Executive Hiroto Saikawa to issue an
uncharacteristic rebuke calling Renault's stance "most
regrettable."
Under the proposed plan, Mr. Bolloré would get the committee
seat, said people familiar with the discussions.
One of Nissan's independent directors, Masakazu Toyoda, wrote to
Renault Chairman Jean-Dominique Senard with the offer, said one of
the people.
Nissan wants to create three new board committees -- on audit
matters, director nominations and executive compensation -- to
address governance problems that Nissan has said allowed alleged
wrongdoing by Mr. Ghosn to go unnoticed by company watchdogs.
Shareholders are set to vote on the plan at the annual Nissan
shareholder meeting June 25. It requires a two-thirds majority to
pass, so Renault's support is essential.
At Renault's shareholder meeting last week, Mr. Senard said that
the argument involved "a fundamental detail," but that there was no
need to "cause an eruption of Mount Fuji."
Nissan had already agreed to put Mr. Senard on the nomination
committee, but he said that wasn't enough. "We have two Nissan
representatives sitting on Renault committees, and I thought the
least we can do is have two Renault representatives sit in Nissan
committees," he said. "I could not very well vote in favor of a
change in governance, unless that very simple condition be
respected from the start."
The Japanese car maker had sought to keep Mr. Bolloré off the
audit committee because it thought his role as Renault's most
senior executive might conflict with the committee's job of
checking that Nissan's business plans were in Nissan's best
interests.
The conflict-of-interest concerns were hypothetical, but Nissan
was concerned after an outside committee tapped to review lessons
of the Ghosn case said Nissan should avoid the appearance of
conflicts of interest, said people familiar with the talks.
Since Mr. Ghosn's arrest and indictment, Nissan and Renault have
clashed about aspects of the investigation into his alleged
wrongdoing and over the future shape of the alliance, with Nissan
fending off a merger plan by Renault and helping derail a merger
between Renault and Fiat Chrysler Automobiles NV.
Mr. Senard said last week that Renault has lost influence in the
alliance since a 2015 revision to its shareholding agreement with
Nissan, which limited the ability of Renault to exercise its voting
rights.
"I won't be the chairman who will lead to a further reduction of
Renault's influence in the alliance, because I don't think that
would be acceptable," Mr. Senard told shareholders.
Write to Sean McLain at sean.mclain@wsj.com and Nick Kostov at
Nick.Kostov@wsj.com
(END) Dow Jones Newswires
June 19, 2019 13:01 ET (17:01 GMT)
Copyright (c) 2019 Dow Jones & Company, Inc.
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