Nissan Motor Co. on Wednesday appeared willing to have Renault SA of France buy an equity stake in the struggling automaker, saying specific conditions for the deal would hinge on further talks.
In a Wednesday morning statement released hours after Renault’s proposal in Paris Tuesday to take a 35 percent stake in Japan’s No. 2 automaker, Nissan said, “We will decide the conditions for an alliance in the coming days so a conclusion can be reached by month’s end.”
A 35 percent equity stake would give Renault power to veto key strategic proposals at Nissan’s shareholder meetings.
A Nissan-Renault alliance would also have combined annual production of about 4.8 million vehicles, making it the third-largest automotive group in the world behind Volkswagen group of Germany and Toyota Motor Corp.
Renault issued a brief statement after its board meeting, saying “Renault is proposing to Nissan to engage in an exclusive negotiation on the conditions of this alliance, which would include Renault taking a stake of about 35 percent.”
Nissan responded by saying, “We have decided to negotiate exclusively with the French motor company … and expect the alliance Renault has offered to enable us to complement each other and create synergies that will benefit Nissan’s future business operations.”
Renault, the ninth-largest automaker worldwide in terms of production, is seen paying over 500 billion yen for the Nissan stake and an additional amount for a stake in Nissan Diesel Motor Co., which makes heavy-duty trucks, industry sources said.
Renault is expected to put up some 600 billion yen in capital in both Nissan and Nissan Diesel, and Nissan could use the cash to help repay some of its 2 trillion-yen plus in consolidated interest-bearing liabilities, sources said. Nissan has been selling of real estate holdings and other assets as part of major restructuring designed to curtail those debts.
Renault will probably assign two or three of its executives to serve on Nissan’s board, including a vice president who would receive some of the presidential powers held by Nissan President Yoshikazu Hanawa, sources said.