Nissan Will Buy Stake in Renault
TOKYO (AP) _ Nissan Motor Co. will buy a 13.5 percent stake in its French partner Renault SA for $1.6 billion as part of a plan to strengthen their alliance, the Japanese automaker said Thursday.
Nissan has returned to profitability under a partnership with Renault that began in 1999 and has shuttered plants, cut jobs and sold off property and stakes in affiliates.
Renault, which originally took a 36.8 percent stake in the Japanese automaker, increased its stake to 44.4 percent this month.
Last year, Nissan said it intended to take a 15 percent stake in Renault. It decided to limit the stake to 13.5 percent to reflect the rise in price of Renault shares since then, Nissan spokeswoman Yoshiko Hayashi said.
The currency rate has also turned unfavorable for the purchase with the yen dropping steadily against the euro, she said. In October, the euro cost about 110 yen, but it has recently risen to about 116 yen.
Nissan retains its right to increase its stake in Renault to 15 percent but was still undecided whether it will do so, Hayashi said.
Nissan has promised to try to reduce its debts in its automotive business to zero in the next three fiscal years starting in April. Nissan’s debts totaled 799 billion yen ($6 billion) as of September.
On the Tokyo Stock Exchange Thursday, Nissan shares rose 1.4 percent to close at 958 yen ($7.22).