Renault Says France, Nissan to Try to Settle Dispute Over Alliance

PARIS—Car maker Renault SA said France's government, which recently increased its stake in the company, is in the "first stage" of discussions with Nissan Motor Co. to resolve a boardroom dispute and rebalance the partnership between the two car makers.

Renault said its board of directors, which met Friday afternoon, initiated the talks.

"The board of directors has decided to take the necessary steps to facilitate the finding and the formal expression of a solution that would preserve Renault's corporate interest and strengthen the alliance" between the companies, Renault said late Friday.

Boardroom tensions have been mounting since French Economy Minister Emmanuel Macron increased the government's stake in Renault to nearly 20% earlier this year from 15%, making the government the largest shareholder in the company to ensure the application of a newly passed French law that doubles the voting rights of the state and other long-term investors.

The French government's involvement is upsetting the balance of power in the alliance between Renault and its Japanese partner, Nissan.

The two companies have been in a technological and capital partnership since 1999, making it one of the most enduring tie-ups in the sector. Renault first bought its 43.4% stake in the then-struggling Japanese company. Nissan owns 15% of Renault but has no voting rights, according to French cross-shareholding rules. In recent years, Nissan has emerged as the larger and more profitable of the two, making up about two-thirds of the combined vehicle sales.

Despite promises made by Mr. Macron to sell the French government's stake down to the previous 15% level, the state has yet to do so. With the double-voting rights, the government currently holds 32.8% of the total votes at the company.

That voting power especially grates on Nissan. On Friday, Nissan Chief Competitive Officer Hiroto Saikawa reiterated that Nissan supports a one-share, one-vote structure.

"We have been discussing with all key stakeholders to try and find a resolution," he said.

"Nissan would like to put this matter behind us as soon as possible so that we can re-establish the foundations of a successful alliance and focus on our real business," he added.

A spokeswoman for the government declined to comment on the negotiations.

Write to Jason Chow at jason.chow@wsj.com

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(END) Dow Jones Newswires

November 06, 2015 15:25 ET (20:25 GMT)

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