Renault-Nissan edging toward compromise with France: sources

Thu Dec 10, 2015 1:43pm EST
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By Laurence Frost and Gilles Guillaume

PARIS (Reuters) - Eleventh-hour talks to resolve a power struggle over French government influence at Renault (RENA.PA: Quote) are making headway, sources said, ahead of a Friday deadline set by the carmaker and Japanese alliance partner Nissan (7201.T: Quote).

"We've made some progress but we're not there yet," said a source close to the carmaking alliance. French officials also indicated that agreement had been reached in principle in some areas of the dispute, with details yet to be worked out.

Tension has been building since April, when Economy Minister Emmanuel Macron temporarily raised the government's Renault stake to secure a permanent increase in its voting rights - and enough clout to veto strategic decisions or tie-ups that might one day endanger domestic interests including jobs.

The move raised hackles at Nissan, 43.4 percent-owned by Renault, pitting Macron against alliance Chief Executive Carlos Ghosn, who has headed both carmakers for the last decade.

Since its 1999 rescue by Renault, Nissan has outgrown its French parent and now leads the way in engineering and other key areas, within an alliance now ranked as the world's fourth-largest carmaker by combined sales.

Renault-Nissan declined to comment on the ongoing talks.

Unless a deal is reached before Renault's board meets on Friday, Nissan has threatened to exit a 2002 alliance agreement currently barring it from raising its non-voting 15 percent stake in its French parent. Lifting the holding to 25 percent would cancel Renault's voting rights in Nissan under Japanese law, effectively ending French control of the alliance.

"It's a serious threat," said a source with knowledge of the government's position. "This is a risk the finance ministry does not want to take, so Ghosn's in a position of strength."   Continued...

The logo of French car manufacturer Renault is seen in front of an advertisement at a dealership in Paris, November 13, 2015.    REUTERS/Christian Hartmann