Nissan, Renault Reach Deal to Resolve Corporate-Governance Dispute, Sources Say -- 2nd Update

Date : 06/19/2019 @ 5:16PM
Source : Dow Jones News
Stock : Fiat Chrysler Automobiles NV (FCAU)
Quote : 14.5  -0.01 (-0.07%) @ 7:13PM

Nissan, Renault Reach Deal to Resolve Corporate-Governance Dispute, Sources Say -- 2nd Update

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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 and Nick Kostov at


(END) Dow Jones Newswires

June 19, 2019 13:01 ET (17:01 GMT)

Copyright (c) 2019 Dow Jones & Company, Inc.

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