Auto crisis: Nissan has 15 months to find an investor to save it
Nissan is looking for an anchor investor to help it survive when its strategic partner Renault sells its stake in the Japanese auto giant, the Financial Times reported.
Two people familiar with the talks said Nissan is looking for a stable, long-term shareholder, such as a bank or insurance group, to replace part of Renault's shareholding as Nissan finalizes the terms of its new electric vehicle partnership with arch-rival Honda.
“We have 12 or 14 months to survive,” said a senior official close to Nissan.
Nissan has not ruled out buying some shares from Honda, considering "all options", as it launches a series ofrestructuring measures due to declining sales in China and the United States.
Additionally, people close to Renault have said it would be willing to sell some of its Nissan shares to Honda as part of a restructuring of its 25-year-old alliance with Nissan. A person close to Renault said a stronger relationship between Nissan and Honda could be "only positive" for the French group.
Nissan and Honda have stepped up partnership talks to develop electric vehicles and software technologies, amid strong pressure from Chinese rivals and greater uncertainty in the United States following Donald Trump's re-election as president.
Nissan Relationship Structure
Nissan, unlike Toyota, missed the hybrid car boom and now also has to invest heavily to follow market trends. Nissan has collaborations with Honda in this very field.
Since announcing their partnership in August, both Japanese companies have downplayed the possibility of an equity tie-up, with a person close to Nissan saying Honda's purchase of a stake remained "a last resort ”.
But the search for an anchor investor has become even more critical, as Nissan's turmoil has attracted investments from Singapore-based Effissimo Capital Management and Hong Kong-based Oasis Management, two of the most high profile in Asia, whose campaigns have previously targeted companies such as Toshiba and Nintendo.
The closer ties between Nissan and Honda came after the restructuring of the long-standing alliance with Renault, agreed after the French automaker rescued the Japanese group from near-bankruptcy in 1999.
However, the relationship was plagued by ongoing battles over unequal shareholding and voting rights: Renault held 43% of Nissan, while Nissan owned just 15% of the French group without voting rights.
After a capital recalibration last year, the French automaker reduced its stake in Nissan to just under 36%, including the remaining 18.7% in a French trust, which it is selling. Nissan has obtained voting rights for its 15% stake in Renault, which will retain a 15% voting share in the Japanese group.
Nissan also holds a 34% stake in junior alliance partner Mitsubishi Motors, which it plans to reduce to 24% as part of emergency turnaround measures.
Nissan declined to comment on the search for an anchor investor and the possibility of Honda buying a stake, but added: “The partnership with Honda is strategically very important and we hope to accelerate the realization of the results of our activities through regular progress of management of both companies".
While Renault is not directly involved in the talks, it may be open to teaming up with Nissan, Honda and Mitsubishi as the automakers combine efforts to develop electric vehicles in response to China's strength in the sector, the people familiar with said the question. Renault said in a statement that there are no ongoing discussions on a broader partnership. He added that he was in favor of a “potential win between Nissan and Honda.”
People familiar with the matter said the outcome of the talks will be a test of how companies could survive the industry upheaval, pitting the likes of megamerger Stellantis against smaller players. small ones like Renault and Nissan that create technological and regional partnerships.
The problem is that, following the breakup between Renault and Nissan, the former saw an increase in profits, while Nissan was unable to follow the performance of the French company. Evidently the management was not up to par. m
People familiar with the talks said a broader collaboration involving Renault and Mitsubishi makes strategic sense, although the French group added that there were no such discussions at the moment.
While there is a large geographical overlap for Nissan and Honda, which focus on China, the US and Japan, Renault's presence would bring strength in Europe. Meanwhile, both Renault and Honda are attracted by Mitsubishi's competitive advantage over Chinese rivals in Southeast Asia and its advanced plug-in hybrid technology.
Regarding collaboration between the three Japanese automakers, Mitsubishi Motors said that "we are currently exploring all possibilities and are eager to cooperate in areas where we can leverage our strengths," but added that they have not yet been specific details defined.
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The article Auto Crisis: Nissan has 15 months to find an investor to save it comes from Economic Scenarios .
This is a machine translation of a post published on Scenari Economici at the URL https://scenarieconomici.it/crisi-auto-nissan-ha-15-mesi-per-trovare-un-investitiore-che-la-salvi/ on Sun, 01 Dec 2024 06:15:53 +0000.