Renault to sell 5% stake in Nissan to Japanese carmaker itself

The Renault Group announced on Tuesday that it will sell up to 211,000,000 shares in the Japanese company Nissan, representing around 5% of the Japanese group's capital, to the Japanese company itself. 

The value of this 5% stake has been set at 765 million euros. This is part of the total 28.4% of Nissan shares that were transferred by the French carmaker to a French trust on 8 November 2023. In other words, Renault currently owns 28.4% of Nissan, but committed earlier this year to significantly reduce its stake. Once the deal is fully executed, the two automakers will continue to hold 15% stakes in each other.

The sale will be carried out as part of the share buyback programme announced by Nissan on 12 December 2023, which will be executed on Wednesday, Renault Group said in an official statement.

Under the new agreement, Renault Group and Nissan will continue to have a 15% cross-shareholding, as outlined by both corporations.

This sale of Nissan shares by the Renault Group would result in a sale value of up to EUR 765 million at the date of the transaction, as well as a capital loss of up to EUR 1.5 million, which would affect the net income of the Renault Group's balance sheet.

This capital loss is included in the section of the accounts entitled "Other operating income and expenses"; a movement that "would not affect the Group's operating result", as acknowledged by the French company. 

The transaction, which will have no impact on the other Nissan shares on the Renault Group and Renault S.A. balance sheet, is part of the Renault Group's capital allocation strategy, which is divided into two phases. The first concerns the implementation of the strategic projects of the Group's "Revolution" phase. The second phase concerns the continued development of the Renault Group around its various value chains and shareholder returns, as reported by media outlets such as Le Matin and Bolsamania.

Automakers Renault and Nissan, partners for 24 years, officially launched the new model of their partnership on 8 November for February, replacing previous agreements that have governed the operation of the business alliance.

Nissan said the latest move is "in line with its commitment to enhance shareholder returns and capital efficiency, as well as continuously improve its financial performance and maintain financial flexibility for future growth".