Nissan acquires ¥79.9 billion in shares from Renault to boost EV development

Nissan Motor Co. will buy back ¥79.9 billion ($551 million) worth of its shares from Renault SA, part of an agreement to rebalance its alliance with the French carmaker.

The Japanese company plans to acquire around 195.5 million shares using its net cash position, it said Thursday. The deal hands Renault additional funds for the development of electric vehicles as it competes with Chinese automakers pushing into Europe.

Renault will get as much as €494 million ($551 million) as a result of the deal, supporting its ambition to return to an investment-grade rating, it said in a separate statement. Nissan and Renault decided last year to reshape their decades-old alliance following years of acrimony.

Renault Chief Executive Officer Luca de Meo said in November that selling Nissan shares would give him additional options to speed up development of more affordable EVs. The company in January canceled the listing of its software and EV unit Ampere due to slowing demand for battery-powered cars and a weak IPO market.

Renault sold an initial tranche of Nissan stock late last year, netting €765 million, and sold a second tranche in March. The company plans to lower its stake in Nissan to 15%, from an initial 43%. Nissan will cancel all the acquired shares on Oct. 3, it said.

In July, Nissan slashed its operating-profit outlook for the year through March 2025 to ¥500 billion due to weak sales in Japan and North America. The automaker has also been struggling in China, where it faces intensifying competition from local EV makers led by BYD Co.

“Given Nissan’s tough business situation and cash liquidity, I think the ‘buyback & cancel’ plan will proceed gradually, not all at once or in a large portion," Bloomberg Intelligence senior auto analyst Tatsuo Yoshida said Thursday.

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