Renault May Sell Part Of Its Nissan Stake, Spin Off EV Business With IPO
Renault is eyeing up a pair of major moves to secure the financing necessary to allow it to transition to electric vehicle manufacturing and take on rivals like Volkswagen and Tesla.
Renault may follow Ford’s lead in carving out a part of the business to focus exclusively on EVs. That may become its own source of cash if, as Reuters reports, it offers to sell shares in the business with an initial public offering.
If the company does so, it would likely happen in the second half of 2023 but Thierry Pieton, Renault‘s finance head, said that the plans would require approval from its alliance partner, Nissan. He said, though, that the Japanese automaker is “in the loop” about its financial planning.
Once Renault’s EV and ICE businesses are broken up, it may seek to ally the latter with a partner, such as Geely. It has already struck a deal with the Chinese automaker, which owns Volvo, for a joint production site in South Korea.
The French automaker is also looking at rebalancing its partnership with Nissan, according to unnamed sources who spoke to Bloomberg. Renault could raise billions of dollars for its shift to EVs by carving off a piece of its stake in the Japanese automaker.
It owns 1.83 billion Nissan shares that are worth 983.5 billion yen ($7.6 billion USD at current exchange rates). The Japanese automaker, though, may jump at the opportunity to buy back some of Renault’s 43 percent stake in it.
The “Alliance” between Renault and Nissan, now 23-years-old, is the subject of some tension because of how lopsided it is. By contrast, Nissan owns just a 15 percent share in Renault, meaning that it lacks voting rights on that company’s board. If the French automaker sells enough shares to get down to the same level, it could raise about €4.6 billion ($4.9 billion USD) in cash, according to Bloomberg.
The Renault-Nissan alliance outlined plans to jointly invest in electrification earlier this year, potentially complicating the French automaker‘s attempts to separate its EV business. Given all the complicating factors, any official decisions may take months to reach, sources said.