Renault and Nissan have signed a deal aimed at easing long-standing tension between the two companies, allowing them to move forward at a time of unparalleled challenges for the automotive industry.
As part of the hard-won pact, Renault will cut its holding in Nissan to 15 per cent, from 43 per cent, to rebalance capital ties, the partners said on Monday, resolving a cause of friction that slowed co-operation at a crucial time for car makers globally.
The agreement also includes the joint development of several models globally.
Nissan intends to invest in Renault’s electric-vehicle business Ampere in exchange for a stake as big as 15 per cent stake in the entity, which is being separated from the French car maker's combustion-engine and power-train operations.
Mitsubishi, the junior partner in the alliance, will also consider investing in Ampere.
The partners agreed to collaborate on several industrial projects, with a final pact still subject to a limited number of conditions, including regulatory approvals expected to be cleared by the end of the first quarter.
The deal is scheduled to close by the end of the year.
Those projects could generate hundreds of millions of euros in profit for the companies over time, stretching to billions “if things go very, very well”, chief executive Luca de Meo told reporters at a briefing in London.
“The relevance of these projects has been underestimated so far.”
The ventures include the development of several new models at production sites in South America and India from joint platforms, as well as Europe, including an electric van called the FlexEVan.
In Renault’s core region, the partners will also collaborate on electric vehicle charging and recycling.
The agreement is designed to give new impetus to an almost 24-year-old partnership that nearly collapsed after the 2018 downfall of its former leader Carlos Ghosn.
The new alliance deal will be put in place for an initial period of 15 years.
Today’s agreement caps months of fraught negotiations made more difficult by different time zones, with crucial meetings often taking place by video conference in the middle of the night.
Cultural differences between France and Japan led to frequent misunderstandings, further exacerbating the mutual suspicion that had been dogging the alliance for years.
“For Nissan, greater freedom in management is a positive development. The projects are essentially initiatives that have been stagnant until now, and the alliance should already have been working on them,” said Tatsuo Yoshida, Bloomberg Intelligence analyst.
“If Nissan buys back its own shares and then cancels them, that would be positive for Nissan’s stock price, but considering its current cash, that unlikely to happen right now.”
Mr de Meo, who first publicly spoke about a plan to overhaul Renault last February, worked for months to rebuild trust with Nissan chief executive Makoto Uchida in a bid to reset the partnership.
Discussions intensified in October when Mr Uchida and chief operating officer Ashwani Gupta met in Japan with Mr de Meo and Francois Provost, who oversees Renault’s partnerships.
The agreement helps to fix an imbalance that has been a source of tension and resentment for years.
While Renault has an outsize stake in Nissan, the Japanese car maker sold 3.3 million vehicles in 2022, compared to its partner’s 2.05 million.
Renault’s stake also includes voting rights while Nissan’s does not. Five years ago, fears that Ghosn — chairman of both companies and its alliance at the time — would seek closer integration, including a merger, was a factor in his removal and arrest on charges of underreporting compensation.
Renault plans to transfer 28.4 per cent of its shares in Nissan into a French trust, with voting rights to be neutralised for most decisions.
The company will keep on benefitting from Nissan dividends until the stake is sold. The trustee will be instructed to sell the shares when it will be “commercially reasonable” in a co-ordinated and orderly process.
Moreover, Renault has no obligation to sell the stake within a specific time frame.
“A well-working alliance is highly desirable for economies of scale and cost avoidance, but it remains to be seen whether a smaller stake in Nissan can achieve this,” said Barclays analyst Henning Cosman.
Learn more about Qasr Al Hosn
In 2013, The National's History Project went beyond the walls to see what life was like living in Abu Dhabi's fabled fort:
Labour dispute
The insured employee may still file an ILOE claim even if a labour dispute is ongoing post termination, but the insurer may suspend or reject payment, until the courts resolve the dispute, especially if the reason for termination is contested. The outcome of the labour court proceedings can directly affect eligibility.
- Abdullah Ishnaneh, Partner, BSA Law
Innotech Profile
Date started: 2013
Founder/CEO: Othman Al Mandhari
Based: Muscat, Oman
Sector: Additive manufacturing, 3D printing technologies
Size: 15 full-time employees
Stage: Seed stage and seeking Series A round of financing
Investors: Oman Technology Fund from 2017 to 2019, exited through an agreement with a new investor to secure new funding that it under negotiation right now.
LAST-16 FIXTURES
Sunday, January 20
3pm: Jordan v Vietnam at Al Maktoum Stadium, Dubai
6pm: Thailand v China at Hazza bin Zayed Stadium, Al Ain
9pm: Iran v Oman at Mohamed bin Zayed Stadium, Abu Dhabi
Monday, January 21
3pm: Japan v Saudi Arabia at Sharjah Stadium
6pm: Australia v Uzbekistan at Khalifa bin Zayed Stadium, Al Ain
9pm: UAE v Kyrgyzstan at Zayed Sports City Stadium, Abu Dhabi
Tuesday, January 22
5pm: South Korea v Bahrain at Rashid Stadium, Dubai
8pm: Qatar v Iraq at Al Nahyan Stadium, Abu Dhabi
GAC GS8 Specs
Engine: 2.0-litre 4cyl turbo
Power: 248hp at 5,200rpm
Torque: 400Nm at 1,750-4,000rpm
Transmission: 8-speed auto
Fuel consumption: 9.1L/100km
On sale: Now
Price: From Dh149,900
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A little about CVRL
Founded in 1985 by Sheikh Mohammed bin Rashid, Vice President and Ruler of Dubai, the Central Veterinary Research Laboratory (CVRL) is a government diagnostic centre that provides testing and research facilities to the UAE and neighbouring countries.
One of its main goals is to provide permanent treatment solutions for veterinary related diseases.
The taxidermy centre was established 12 years ago and is headed by Dr Ulrich Wernery.
Tamkeen's offering
- Option 1: 70% in year 1, 50% in year 2, 30% in year 3
- Option 2: 50% across three years
- Option 3: 30% across five years
UAE%20set%20for%20Scotland%20series
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The Melbourne Mercer Global Pension Index
The Melbourne Mercer Global Pension Index
Mazen Abukhater, principal and actuary at global consultancy Mercer, Middle East, says the company’s Melbourne Mercer Global Pension Index - which benchmarks 34 pension schemes across the globe to assess their adequacy, sustainability and integrity - included Saudi Arabia for the first time this year to offer a glimpse into the region.
The index highlighted fundamental issues for all 34 countries, such as a rapid ageing population and a low growth / low interest environment putting pressure on expected returns. It also highlighted the increasing popularity around the world of defined contribution schemes.
“Average life expectancy has been increasing by about three years every 10 years. Someone born in 1947 is expected to live until 85 whereas someone born in 2007 is expected to live to 103,” Mr Abukhater told the Mena Pensions Conference.
“Are our systems equipped to handle these kind of life expectancies in the future? If so many people retire at 60, they are going to be in retirement for 43 years – so we need to adapt our retirement age to our changing life expectancy.”
Saudi Arabia came in the middle of Mercer’s ranking with a score of 58.9. The report said the country's index could be raised by improving the minimum level of support for the poorest aged individuals and increasing the labour force participation rate at older ages as life expectancies rise.
Mr Abukhater said the challenges of an ageing population, increased life expectancy and some individuals relying solely on their government for financial support in their retirement years will put the system under strain.
“To relieve that pressure, governments need to consider whether it is time to switch to a defined contribution scheme so that individuals can supplement their own future with the help of government support,” he said.
The specs
Engine: 1.5-litre 4-cylinder petrol
Power: 154bhp
Torque: 250Nm
Transmission: 7-speed automatic with 8-speed sports option
Price: From Dh79,600
On sale: Now
Tom Fletcher on 'soft power'
Ruwais timeline
1971 Abu Dhabi National Oil Company established
1980 Ruwais Housing Complex built, located 10 kilometres away from industrial plants
1982 120,000 bpd capacity Ruwais refinery complex officially inaugurated by the founder of the UAE Sheikh Zayed
1984 Second phase of Ruwais Housing Complex built. Today the 7,000-unit complex houses some 24,000 people.
1985 The refinery is expanded with the commissioning of a 27,000 b/d hydro cracker complex
2009 Plans announced to build $1.2 billion fertilizer plant in Ruwais, producing urea
2010 Adnoc awards $10bn contracts for expansion of Ruwais refinery, to double capacity from 415,000 bpd
2014 Ruwais 261-outlet shopping mall opens
2014 Production starts at newly expanded Ruwais refinery, providing jet fuel and diesel and allowing the UAE to be self-sufficient for petrol supplies
2014 Etihad Rail begins transportation of sulphur from Shah and Habshan to Ruwais for export
2017 Aldar Academies to operate Adnoc’s schools including in Ruwais from September. Eight schools operate in total within the housing complex.
2018 Adnoc announces plans to invest $3.1 billion on upgrading its Ruwais refinery
2018 NMC Healthcare selected to manage operations of Ruwais Hospital
2018 Adnoc announces new downstream strategy at event in Abu Dhabi on May 13
Source: The National
SPECS
Nissan 370z Nismo
Engine: 3.7-litre V6
Transmission: seven-speed automatic
Power: 363hp
Torque: 560Nm
Price: Dh184,500
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The specs: 2018 Audi R8 V10 RWS
Price: base / as tested: From Dh632,225
Engine: 5.2-litre V10
Gearbox: Seven-speed automatic
Power: 540hp @ 8,250rpm
Torque: 540Nm @ 6,500rpm
Fuel economy, combined: 12.4L / 100km
Libya's Gold
UN Panel of Experts found regime secretly sold a fifth of the country's gold reserves.
The panel’s 2017 report followed a trail to West Africa where large sums of cash and gold were hidden by Abdullah Al Senussi, Qaddafi’s former intelligence chief, in 2011.
Cases filled with cash that was said to amount to $560m in 100 dollar notes, that was kept by a group of Libyans in Ouagadougou, Burkina Faso.
A second stash was said to have been held in Accra, Ghana, inside boxes at the local offices of an international human rights organisation based in France.
