Exclusive: Nissan seeks end to Renault control in French power struggle

Tue Oct 27, 2015 9:17am EDT
 
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By Laurence Frost and Gilles Guillaume

PARIS (Reuters) - Nissan Motor (7201.T: Quote) has drawn up proposals to exit Renault (RENA.PA: Quote) control by purchasing a larger stake in its French parent, sources told Reuters, amid an escalating power struggle between Renault-Nissan alliance boss Carlos Ghosn and the French state, Renault's biggest shareholder.

In a three-page document passed to the French government, the Japanese carmaker calls for deep changes to the 16-year-old alliance, giving the companies equal weight in joint decisions and "better balanced" cross-shareholdings of 25-35 percent, government and company sources said.

Renault currently holds 43.4 percent of Nissan and the casting vote in their Dutch-registered Renault-Nissan BV management structure. Nissan in turn owns a non-voting 15 percent of Renault.

The Nissan demands are a response by 61-year-old Ghosn, CEO of both carmakers, to a surprise April move in which Economy Minister Emmanuel Macron raised France's Renault stake from 15 to 19.7 percent - informing Ghosn in a phone call only hours before the transaction took effect.

The stand-off marks a new low in Ghosn's relationship with the French government. It also threatens the future of an automotive pairing hailed as a rare success story in an industry whose recent past is littered with failed mergers.

France's stake increase, described as temporary, allowed the government to force a permanent doubling of its voting rights through the company's shareholder meeting by blocking Ghosn's proposed opt-out from a new law entering force next year.

A retaliatory plan to hand more power to Nissan - by restoring its voting rights in Renault to counter the government's increased clout - already has the Renault board's support. French state representatives abstained from the April 16 vote and have since contested its legitimacy, sources said.

But the new Nissan proposals, in a Sept. 3 note initialled by Ghosn's second-in-command Hiroto Saikawa, go much further.   Continued...

 
A man walks past the logo of Nissan Motor Co. at the company's showroom in Yokohama, south of Tokyo May 13, 2015. REUTERS/Toru Hanai