Home»Informational»When did Renault buy Nissan? 

When did Renault buy Nissan? 

Pinterest WhatsApp

When did Renault buy Nissan? It’s a common question on the lips of many. Just as Hyundai owns cheap Kia cars, so do many people think Renault bought Nissan.

The Japanese Nissan automobile company entered into an alliance with France Renault on 27th March 1999 as strategic partners. At this time, Nissan was facing financial strain and needed an immediate helper. Renault never bought Nissan, however, Renault bought into Nissan shares at the beginning of their alliance. 

Renault then continued increasing their shareholding in Nissan which also bought into Renault shares, though little. So when and how did Renault buy and increase shares? So, does Renault own Nissan? Let’s find out.

When Did Renault First Buy Into the Shares of Nissan?    

Since Nissan was facing financial constraints, Renault had to come in with more power in terms of finance. Therefore, Renault bought 36.8% of Nissan shares revitalizing the financial standing of the alliance. Nissan never bought Renault shares at that time, they, however, planned to buy into Renault shares as soon as they came back on track.

The alliance bore fruits and by 2001, they were back on toes. At this point, Nissan bought 15% of Renault shares. 

When Did Renault Buy Nissan?  Strengthening Bonds 

To better their corporation, the alliance coined the Nissan-Renault BV. This was a joint company that was meant to oversee and iron out corporate matters in the alliance such as leadership. The Nissan-Renault BV was co-owned by the two companies so that they had half shares each. It was located in Amsterdam and has since then been the key player in harmonizing the two ally companies. RNBV provides a neutral ground for both companies when it comes to the build strategy and exchange of ideas.

When did Renault buy Nissan? How Did the Alliance Fair On?  

Nissan has the largest market value in the alliance. However, the terms of the alliance gave Renault voting power in Nissan. Nissan has no voting power in it’s Renault shareholding. Despite the booming business, these facts have brought significant shakes in the alliance. 

The French government has 15% shares in Renault, this makes it the largest individual shareholder in the company. To further strengthen their influence in the company, the French government passed the 2014 Florange law. 

This law gave the French government a double voting power of companies’ long-term shareholders unless the company quits. This is a policy that even strengthened the control of the French government on Renault.

Renault responded by trying to opt-out as a means of avoiding the problematic government control, however at that time, the French government bought 1.23 billion euros worth of short term shares. This made the Renault-planned opt-out curtailed. The control of Renault indirectly put Nissan policy under the French government which was worrying for both Nissan and Japan.

Nissan, in turn, responded by posing a threat of leaving the alliance if Renault failed to give Nissan voting power in Renault, sell it’s controlling stake in Nissan, and revitalize the member control over the alliance. These demands were posed by Hiroto Saikawa, the then second in command after Ghosn. The French government put deaf ears on the demands and planned to negotiate a deal with Ghosn.

Plans to Merge Renault and Nissan

Due to the boiling up tensions from both members in the Renault-Nissan alliance, Ghosn planned to make the alliance permanent. This would make Renault and Nissan merge to form a single company. The company, however, would be heavily influenced by the French government given the much influence it already had in the Alliance.

In November 2018, the man eyed by the French government to turn the key of an irreversible alliance was arrested by the Japanese government. This was the then Alliance C.E.O and chairman, Carlos Ghosn. He is the one behind the big success of the Nissan-Renault-Mitsubishi alliance.

So, Did Nissan Get Gobbled Up by Renault?

No, actually, Nissan-Renault alliance, now Nissan-Renault-Mitsubishi alliance is slowly fading away with the absence of its mastermind, Ghosn. After his arrest, the two group’s joint corporate governing structure is not that active. 

Nissan Still Struggling to Hold Ground in the Alliance  

After the exit of Carlos Ghosn, Nissan, which is the highest market shareholder, is still struggling to hold ground in controlling the alliance. Nissan has been pushing to buy into Renault’s stake in Nissan. With this power wrangles in place, the alliance and individual companies are losing their market authority slowly but steadily.

11 months after the arrest and dismissal of Carlos Ghosn, the alliance vehicle sales have dropped by more than 500,000 vehicles. The share prices of Nissan and Renault have significantly dropped.

When Did Renault Buy Nissan?  Nissan’s Plan to Leave the Alliance

Nissan has been unsettled about the almost half stake Renault holds in it. Renault has been too protective of its standings. With the interference from the French government, Nissan feels threatened and in a bus headed to subdue. To evade this, Nissan has been pushing to have matters equalized.

Nissan holds the ground that the alliance was based on negotiations, mutual agreement, and cooperation for the benefit of competition. It further holds that the two companies might differ in opinion and strategy now that they still hold a great percentage of individual sovereignty.

In the early days after the arrest of Carlos Ghosn, there were discussions at some point, there was a proposal of Renault taking over Nissan. However, with the dangers of such a move, it was decided that a merger of Renault and Nissan would work better. The merger strategy was again dismissed by Nissan who wanted to stand alone.

In the attempts to stand alone, Nissan has been facing significant failure in profits, things aren’t good at Renault also. Top alliance officials still feel that the alliance is central to their survival. There have been meetings to discuss the way forward. 

In the November meeting in France, there were plans to pull resources together in a bid to restore the fading glory. As a measure of a healthy corporation, there was appointed the alliance general secretary. The alliance is still struggling in its deathbed and greater chances are that Nissan might end up splitting up with Renault.

So, the question, When did Renault buy Nissan?  Shall be answered by saying – No, Renault never bought Nissan. However, Renault has a big stake in Nissan.   

Previous post

Where Are Subarus Made?  

Next post

What does SV mean On a Car? 

No Comment

Leave a reply