France Ready to Cut Renault Stake to Support Nissan Ties

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France is prepared to consider cutting its 15% stake in Renault SA to help shore up the carmaker’s alliance with Nissan Motor Co., Agence France-Press reported Saturday, citing an interview with Finance Minister Bruno Le Maire.

France is ready to consider reducing its holding if it leads to a “more solid” alliance between the Japanese and French automakers, Le Maire told AFP at the Group of 20 finance ministers meeting in Fukuoka, Japan.

Nissan would prefer a full exit because the state’s activism has generated tension within the alliance and it’s not clear that a reduction of the French stake in the automaker would change that, according to a person familiar with the matter. 

France isn’t planning an imminent stake sale in Renault, according to a government official asked about Le Maire’s comments.

Le Maire also said that Renault should concentrate on forging closer links with Nissan before seeking other alliances. Renault declined to comment and a Nissan spokesman said the company is committed to the alliance.

The comments follow the collapse of discussions between Fiat Chrysler Automobiles NV and Renault to form a global car manufacturing powerhouse. The talks ended abruptly earlier this week when Fiat withdrew its offer after France asked for more time to seal the deal as it tried to get the backing of its Japanese partner Nissan.

In an interview in Le Figaro published on Thursday, Le Maire said the long-term goal of the French state isn’t to run companies. He also said that “all options could be considered” regarding the French stake in the Japanese carmaker. Renault owns 43% of Nissan.

Saturday’s remarks from Le Maire seem to go a step further in trying to soothe a rocky relationship with Nissan following a year that saw the arrest of Carlos Ghosn, the larger-than-life boss of the alliance. Ghosn was arrested in Japan over misuse of corporate funds.

“What minority shareholders want is very clear and simple: France to sell down their Renault stake, Renault to sell down their Nissan stake, rebalance the Alliance and take care of business,” Arndt Ellinghorst, an analyst at Evercore ISI, said by e-mail.

Nissan shares have tumbled 30% in the past year, while Renault is down almost 36%.

“The French government should have no ownership of Nissan,” Mark Urakawa, a portfolio manager at Taiwan Double Line Corp. in Taipei, told Bloomberg News. “It’s time to cut loose of both the government and the Renault ownership.”

— With assistance by Victoria Batchelor

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