RNO Renault SA

   By Ed Frankl 
 

Shares in Renault SA climbed on Monday, after it confirmed it was in talks around its alliance with Nissan Motor Co., including over a possible investment in the French car maker's new electric-vehicle business.

At 0800 GMT shares in Renault were up 5.1% to EUR32.25.

Reports on Friday, including in The Wall Street Journal and the Financial Times, said Nissan was pushing Renault to sell a portion of its stake in the Japanese company in exchange for Nissan joining a new unit Renault is creating to house its electric-vehicle assets.

Renault and Nissan said Monday they were engaged in discussions around Nissan investing in Renault's EV entity, which would support Renault's long-term strategy.

They added the talks included agreeing on a set of strategic common initiatives across markets, products, and technologies.

The rise in share-price was no surprise, according to RBC Capital Markets analyst Tom Narayan, who said in a note that monetization of its Nissan stake is top of the list of catalysts for many Renault shareholders.

Reducing Renault's approximately 6 billion euro ($5.84 billion) stake from 43% to 15%, as media reports unconfirmed by the company have indicated, could mean monetizing EUR4 billion worth of Nissan shares, Narayan said.

However, simply monetizing the Nissan stake doesn't mean the cash proceeds will go to Renault shareholders, as much might be reinvested into the EV business, as opposed to being paid out in a special dividend to shareholders, he cautioned.

Write to Ed Frankl at edward.frankl@dowjones.com

(END) Dow Jones Newswires

October 10, 2022 04:24 ET (08:24 GMT)

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