Nissan Motor Co. and Renault SA (OTC:RNLSY) agreed on Monday to restructure their 20-year-old automaking partnership in a way that will put them on equal footing and have the Japanese company invest in Renault’s (EPA:RENA) new electric vehicle business.
The announcement came after almost four months of intense talks. Sources told Reuters that the talks were made harder by worries about sharing intellectual property, as Renault was trying to form new partnerships with companies outside of the alliance.
Under the deal, which still needs to be approved by the board, Renault will cut its stake in Nissan (OTC: NSANY) from around 43% to 15%, giving the remaining 28% to a French trust.
Related: Renault and Nissan have agreed not to announce a new agreement on December 7 – JNN
Renault would then tell the trustee to sell those shares, which are worth about $4.1 billion based on current market prices, in a coordinated and orderly way if it made business sense for the French automaker.
Nissan also said it would put money into the new battery-electric vehicle unit that Renault is starting up.
Since the two car companies said in early October that they were in talks to change how they worked together, Renault shares have gone up almost 25% while Nissan shares have only gone up 3%.
How the Franco-Japanese alliance develops in the future will affect both companies and their junior partner, Mitsubishi Motors (OTC: MMTOF) Corp.
It also shows how the huge changes in technology in the auto industry are forcing companies to work with and against a huge number of newcomers and tech companies.
Renault, for example, has said that it will work with companies like Geely Automobile Holdings (OTC:GELYF) in China and Qualcomm (NASDAQ:QCOM) Inc., which is a big chipmaker.
Reuters said that the French company is also trying to finalise a deal with Geely and bring in Saudi Arabian state oil company Aramco (TADAWUL:2222) as an investor and partner to work on developing gasoline engines and hybrid technologies.
Related: Nissan gets a green loan of $1.44 billion to invest in zero-emission transportation.
