Nissan shares rise after overhaul of Renault alliance
TOKYO, Jan 31 (Reuters) -Shares of Nissan Motor Corp 7201.T rose in Tokyo on Tuesday, after the Japanese automaker and its French partner Renault SA RENA.PA announced a sweeping overhaul of their two-decade-old alliance putting them on equal footing.
Nissan shares climbed as much as 3.1% in early trade before giving up some gains. They finished the morning session up 2.1%, outperforming a slightly negative Nikkei 225 share average .N225.
Under the deal announced on Monday, Nissan and Renault will now hold 15% stakes in each other, and Nissan will get voting rights with its stake. Previously, Renault held around 43% of the Japanese automaker and Nissan did not have voting rights.
The uneven nature of the alliance had long been a source of friction for Nissan executives.
"The normalisation of the capital relationship will raise the amount of freedom Nissan has in terms of management, making it easier to adopt a strategy that focuses on the United States, China and emerging markets," Masayuki Kubota, chief strategist at Rakuten Securities, told Reuters following Monday's announcement.
It will see Renault put around 28% of the Japanese automaker in a French trust. That includes a lock-up that prevents share sales for a certain period, as well as a standstill obligation, which puts other limits on a stock sale.
The restructuring addresses historical concerns about shareholder governance, given that Nissan was unable to exercise its voting rights, Nomura analyst Masataka Kunugimoto said in a note.
"A relationship where both companies have equal voting rights of 15% in each other should substantially reduce concerns about governance," Kunugimoto said. "Overall, we think this announcement is likely to lead to a reappraisal of Nissan's shares."
Nomura has a "buy" rating on the stock, and a target price of 750 yen, well above Tuesday's high of 468.1 yen.
Over the past three years, Nissan's shares have fallen by around 23%, well behind a 24% gain by industry leader Toyota Motor Corp 7203.T and a 4% rise by Renault.
Renault's shares closed 4% lower on Monday after the deal was announced.
Nissan and Renault agree to overhaul alliance, this time as equalsnL4N34F0YY
TIMELINE-From boom to bottom and now big change: Renault and Nissan reshape alliancenL4N34B1FT
ANALYSIS-Renault cedes power at Nissan for uncertain benefitsnL8N34F2HK
INSTANT VIEW-Nissan, Renault agree to overhaul alliance, putting themselves on equal footingnL4N34F1M3
Reporting by David Dolan, Daniel Leussink and Rae Wee in Singapore; Editing by Jamie Freed
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