By Scott Kanowsky
Investing.com -- Shares in Renault SA (EPA:RENA) dropped on Monday after the French carmaker announced that it would reduce its stake in Japan's Nissan Motor Co., Ltd. (TYO:7201) as part of a broader revamping of their alliance partnership.
In a statement, Renault said the stake would fall to 15% from 43%, with 28.4% of its Nissan shares being transferred into a French trust where voting rights would be "neutralized" for most decisions. However, economic rights, including proceeds from dividends and share sales, would still benefit the manufacturer of models like Dacia and Alpine.
Renault added that it is under "no obligation" to offload the shares within a specific pre-determined period of time.
"Renault Group would instruct the trustee to sell the entrusted Nissan shares if commercially reasonable for Renault Group in a coordinated and orderly process," the company said.
Under the terms of deal, Nissan will retain its 15% stake in Renault. Nissan will also gain voting rights, which it had previously not been able to exercise but has long requested.
Nissan agreed to invest in Renault's electric vehicle and software unit as well, with the goal of eventually becoming a "strategic shareholder."