French Government Upgrades Stakes in Battle With Nissan Over Renault
November 08 2015 - 9:00PM
Dow Jones News
PARIS—The French government opposes significant changes in the
cross-shareholding system that underpin Renault SA's alliance with
Nissan Motors Co., Prime Minister Manuel Valls said, escalating the
battle between the French car maker's biggest shareholders.
Earlier this week the French government entered talks with the
Japanese car maker after Nissan complained about the balance of
cross-shareholdings as well as the government's growing influence
over Renault.
"This alliance between Renault and Nissan must endure as it is
and must remain combative," Mr. Valls said Sunday in a radio
interview. He also poured cold water on media reports saying the
government was seeking a full tie-up between the companies.
"What we want is to keep the alliance, we don't want a
merger."
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 it the
largest shareholder in the company. The move also ensured the
application of a newly passed French law that doubles the voting
rights of the state and other long-term investors.
Despite the escalating conflict between the French government
and Renault Chief Executive Carlos Ghosn , Mr. Valls said he
supports the management at both Renault and 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 holds a 43.4% stake in the Japanese company
while Nissan owns 15% of Renault. Under French cross-shareholding
rules, however, Nissan has no voting rights in Renault.
In recent years, Nissan has emerged as the larger and more
profitable of the two companies, making about two-thirds of the
combined vehicle sales.
The government has pledged to lower its stake in Renault to 15%.
However, the government's decision to enforce the
double-voting-right rule at Renault means the state will have more
power over the carmaker even when lowering its stake back to
15%.
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.
Nissan's board is considering whether to increase its stake in
Renault to rebalance voting power within the Franco-Japanese
alliance, according to people familiar with the matter.
Write to Inti Landauro at inti.landauro@wsj.com
Subscribe to WSJ: http://online.wsj.com?mod=djnwires
(END) Dow Jones Newswires
November 08, 2015 20:45 ET (01:45 GMT)
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