Nissan CEO Says Mutually Decreasing Stock Shares Are Not a Sign of “Break-Up” with Renault
As you probably know, Nissan has been one of the companies hit by the recent volatility of the market, which resulted in the need for a recovery and restructuring plan that would take the company back to a more successful era.
On April 1, Nissan got a new CEO, Ivan Espinosa, who recently presented his Re:Nissan plan, which focused on heavy streamlining, as well as the company consolidating its current assets.
Amond the more concere decisions were the increased job cuts which ended up with the firing of around 20,000 people and the closing of seven of Nissan’s car factories, but it seems that Nissan’s partnership with Renault could also be in jeopardy.
The partnership between Nissan and Renault started back in 1999, when Renault acquired 36.8% of Nissan for $3.5 billion; Nissan promised to invest in the French company once it became financially stable, which happend after the 2001 miracle, when Nissan purchased a 15% stake in Renault. In response to that, Renault increased its stake in Nissan to 43.4%.
But, the situation has been changing. Since then, the companies have been slowly distancing themselves from each other, with Renault selling more and more of the shares they had in Nissan, and it seems that the Japanese company is going to do the same.
As the Japanese media report, Nissan is planning on further reducing its share in Renault, after an earlier agreement that reduced the minimum stake in each company from 15% to 10%. If this is true, selling about 5% of the shares would bring Nissan a vitally important c. $640 million.
“We are bringing down our cross-shareholdings in order to invest in vehicles,” Espinosa said, thus denying that the reduction is actually sign of a “break-up” between the long-time partners.
We don’t know if this is just a short term response to the market’s volatility or a long-term strategy that will see the partnership completely dead, but we hope that the customers won’t suffer because of this.
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