Nissan Motor Co. and Renault S.A. announced Tuesday they will strengthen their partnership by increasing Nissan's stake in the French automaker to 15 percent. Likewise, Renault's stake in Nissan will increase from the current 36.8 percent to 44.4 percent.

The increases are to made by mid-2002.

The automakers also said they will establish Renault-Nissan BV, a management firm that will plan and supervise the implementation of the global alliance operations in the Netherlands in 2002.

Tuesday's announcements, which will push forward the alliance operations of the two firms, are the result of faster-than-expected progress in Nissan's restructuring efforts, including debt reduction, they said.

The cross-shareholding deal is in line with the March 1999 tieup between the two firms, which said that Nissan would obtain a stake in the French partner after improving earnings and that Renault would raise its equity stake in the Japanese carmaker.

Earlier this month, Nissan said it is likely to post a record consolidated operating profit of 187 billion yen for the first half of the 2001 business year, up 39 percent from the same period the year before. It will mark the third consecutive half-year term of record profits for the automaker.

"At the heart of the alliance is the development of the synergy," Carlos Ghosn, Nissan president and CEO, said. "People are working very well, but we need to build motivation for Nissan employees to develop the synergy with Renault. (Taking a stake in Renault) would be the very concrete manifestation of the mutual interest that both employees and management can find into developing the synergy."

Renault will acquire 540 million Nissan shares for a total of 2 billion euros. Nissan is scheduled to acquire a 42 million share stake in Renault after the approval of Renault's board meeting. While the price for the stock will depend on the average trading of the last 20 days before the board meeting, Nissan said the transaction will have no impact on its performance.

Meanwhile, the French government, which currently owns 44.2 percent of Renault, will reduce its Renault share to 37.6 percent, subsequent to the capital increase reserved for Nissan. The French government will eventually reduce its stake in Renault to 25 percent, according to a timetable that will depend on market conditions, the firms said.

Louis Schweitzer, Renault chairman and chief executive officer, is scheduled to become the president of the new joint management firm, while Nissan's Ghosn will be vice president. Six other executives from the two companies will join the firm's eight-member board. The equally owned management firm, while located in the Netherlands, will have its headquarters in Paris and Tokyo, they said.

The new joint venture is virtually the successor of the Global Alliance Committee, the operational organization of the alliance, that has met on a monthly basis.

Nissan and Renault said the new firm will continue to push forward joint operations including planning products, power trains and joint auto parts procurement, but Nissan and Renault will continue its operations separately, they said.