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(Bloomberg) — Renault SA (RNO.PA) and Nissan Motor Co. (7201.T) agreed to further loosen their long-term alliance, giving the struggling Japanese automaker greater financial flexibility as it seeks a turnaround under a new chief executive officer.
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The companies will be able to reduce their cross-ownership to 10%, from 15% previously, Renault said Monday. The move allows Nissan to sell as much as one-third of its Renault stake, which could raise around €690 million ($746 million) at current valuations.
Renault — still Nissan’s biggest shareholder with a 36% stake — has been partially unwinding the partnership amid mounting rivalries and mutual suspicion. The Japanese automaker is under pressure to bolster its finances, refresh an outdated lineup and navigate the upheaval caused by Donald Trump’s tariff push.
The alliance update comes a day before Nissan gets a new chief executive officer. On Tuesday, Ivan Espinosa will officially replace Makoto Uchida, whose tenure was marked by setbacks including the collapse of a potential tie-up with rival Honda Motor Co (7267.T). Nissan has repeatedly stumbled since the 2018 ouster of Carlos Ghosn, who pulled the carmaker out of its last brush with disaster in 1999.
Renault will take over the alliance’s India joint venture and produce a small electric car for Nissan from next year. The company “has a strong interest in seeing Nissan turn around its performance as quickly as possible,” Chief Executive Officer Luca de Meo said.
Nissan, which owns 15% of Renault, will also be released from an earlier commitment to invest in the French partner’s electric-vehicle business Ampere, according to Monday’s statement.
At the same time, Ampere will develop and produce a Nissan-designed EV based on Renault’s Twingo model as of 2026 — evidence that the partnership is “alive and kicking,” Renault Chief Financial Officer Duncan Minto said during a call.
Renault buying Nissan’s 51% holding of the joint India business is meant to help the French company further expand abroad, de Meo said. The transaction is subject to customary regulatory approvals and expected to be completed by the end of the first half.
The impact of the moves on Renault’s free cash flow this year is expected to be around €200 million. The company still confirmed its full-year guidance for free cash flow and its operating margin.