© Reuters. FILE PHOTO: The brand logo of Nissan Motor Corp. is seen on a tyre wheel of the company’s car at their showroom in Tokyo, Japan November 11, 2020. REUTERS/Issei Kato/File Photo/File Photo
TOKYO (Reuters) – Shares of Nissan (OTC:) Motor Corp rose in early trade in Tokyo on Tuesday, after the Japanese automaker and its French partner Renault SA (OTC:) announced a sweeping overhaul of their two-decade-old alliance putting them on equal footing.
Nissan shares were up almost 2%, outperforming a flat share average.
Under the deal announced on Monday, Nissan and Renault (EPA:) 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.
Renault put around 28% of the Japanese automaker in a French trust as part of the deal, which 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 French automaker’s shares closed 4% lower on Monday after the deal was announced.
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