France’s Renault stake blocks deeper Nissan deal — CEO Ghosn

PARIS — Renault and alliance partner Nissan are ready to forge closer capital ties but will only do so if France sells its Renault stake, Chief Executive Carlos Ghosn said on Friday.

The comments are likely to deepen a power struggle that spilled into public view in April 2015 when the government increased its stake in the French car maker to nearly 20% from 15%, with little warning to Ghosn or the board.

Ghosn, the chief executive of both car makers, said the resulting stand-off over government voting rights had persuaded the Japanese car maker that no further consolidation was possible while France continued to hold Renault shares.

“Following the soap opera of double voting rights and the discussion with the French state, Nissan has said very clearly ... that it will not accept any move on capital structure as long as the French state remains a shareholder,” Ghosn told reporters and analysts.

The 18-year-old alliance is bound by cross shareholdings but Renault and Nissan remain separate companies with distinct boards and executive teams.

“The day the French state decides to get out, everything is open, and I can tell you it won’t take too much time,” Ghosn said. “But as long as they are in, and they want to continue to be a shareholder of Renault, the alliance will continue to move as it is.”

The government’s share purchase in 2015, described at the time as temporary, enabled ministers to block a proposed opt-out from a law granting double voting rights to the state and other longterm shareholders. It unleashed a boardroom crisis that led to new Renault-Nissan shareholder pacts at the end of that year.

Tensions resurfaced last month following a scathing Renault submission to a French official report. The car maker accused France of acting on insider information when it bought the additional shares. The state, Renault’s biggest shareholder, now holds 19.74% and two board seats.

Martin Vial, head of the APE state shareholdings agency, demanded a retraction. “These are false allegations and they will have to be rectified,” he told BFM radio on Wednesday.

Renault will review the factual basis of its submission, Ghosn said on Friday. “Anything imprecise will be rectified, but everything true will be maintained.”

Far from the expected apology, his comments cast France as the main obstacle to progress for Renault-Nissan.

“The Japanese would never accept to be part of an entity where — particularly taking into consideration everything which happened — the French state would be a shareholder of Japanese assets,” said Ghosn.

Government spokespeople did not immediately respond to requests for comment.

Renault’s submission to a Jan. 25 Court of Auditors report said the government had exhibited “contradictions and conflicts of interest” and raised its stake from an “insider position” with privileged access to information.

Emmanuel Macron, now the front runner in France’s presidential election, orchestrated the state’s 2015 intervention in his former role as economy minister. —