Renault and France on collision course over Nissan

Mon Dec 7, 2015 9:12am EST
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By Laurence Frost and Gilles Guillaume

PARIS (Reuters) - Renault (RENA.PA: Quote) is drawing up proposals to relinquish some power over its partner Nissan (7201.T: Quote), sources said, and is shoring up support ahead of a likely boardroom clash with the French government.

Renault remains on collision course with its biggest shareholder in a dispute running since April, when French Economy Minister Emmanuel Macron raised the government's stake in the carmaker to boost its corporate clout.

Since its 1999 rescue by Renault, Nissan has outgrown its French partner and under the combined leadership of Chief Executive Carlos Ghosn, the Renault-Nissan alliance has become the world's fourth biggest carmaker by sales.

Nissan now leads in a number of areas such as engineering projects and Renault is pursuing closer integration with its Japanese partner, in which it holds a 43.3 percent controlling stake.

The French state wants to safeguard its strategic interests, which include preserving jobs at home, and raised its stake in Renault April to ensure it would get double voting rights as a long-term shareholder under French law.

The carmaking alliance wants to shield Nissan from possible increased French influence in the future and it has been at loggerheads with the government, which has two representatives on Renault's board.

With board-level negotiations making little headway, Renault is preparing to make good on threats to weaken its grip on Nissan, people with knowledge of the matter said.

"There's nothing that comes close to an agreement," a source close to the alliance said. "It's as if the government wants to find out whether it's a bluff."   Continued...

The Renault automaker company logo is displayed outside a car dealership in Bordeaux, Southwestern France, March 1,2013.   REUTERS/Regis Duvignau