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Mitsubishi may invest in Renault
Posted on Thursday, 26 March 2020 16:03
Two sources in the know have told Reuters that Japanese conglomerate Mitsubishi could invest in French automotive manufacturer Renault in order to strengthen the pair’s alliance with Nissan.
The news provider also cited an earlier article by Les Echos, which said the firm could take a 10.0 per cent stake in the Boulogne-Billancourt-headquartered company, citing an executive with knowledge of the discussions.
However, this person cautioned that there is no guarantee of such an investment taking place as it is just one of a number of potential courses of action, which also include restructuring and cost saving plans.
One of Reuters’ sources noted that no final decision has been made as yet.
No official statement on the matter has been issued at present.
The alliance between Mitsubishi, Renault and Nissan is a strategic partnership and cross-sharing agreement which was established in 1999 between the latter two parties, before the former joined in 2016.
It claims to account for one in nine vehicles sold worldwide and employs in excess of 450,000 people.
However, Reuters said Renault and Nissan’s relationship was negatively impacted by the 2018 arrest of Carlos Ghosn, former chief executive of the alliance, over alleged financial misconduct.
Ghosn is currently an internationally wanted fugitive who fled to Lebanon in December. He denies the accusations which have been levelled against him.
Reuters noted that Renault, Mitsubishi and Nissan now hope to reenergise their alliance and an investment is thought to be one way of doing this as production slows in the wake of the global Covid-19 outbreak.
The largest of the 42 deals targeting an automobile manufacturer to have been announced worldwide during 2020 to date is worth USD 2.34 billion, according to Zephyr, the M&A database published by Bureau van Dijk.
That deal took the form of a capital increase as Tesla completed a public offering of stock equating to a 1.7 per cent stake to undisclosed investors.
© Zephus Ltd