Renault talks with Geely complicated by Nissan concerns, report says

BEIJING -- Nissan's concerns about technology transfers have complicated its partner Renault's plans to sell a large stake in its gasoline-engine business to China's Geely, three people familiar with the talks said.

Renault is pursuing a complex two-pronged restructuring. On one hand, it is aiming to revamp its alliance with Nissan and convince the Japanese automaker to invest in a new electric car unit called Ampere.

At the same time, it also plans to separate out its gasoline-car business, code-named "Horse," and is seeking to sell a large part of it to Geely.

Investors will be looking for details on the state of play for both sets of negotiations on Tuesday when Renault CEO Luca de Meo delivers an update on the French automaker’s strategy and financial projections.

Nissan's concerns about technology rights, which also extend to any potential investment in Ampere, suggest Renault will have to negotiate and potentially settle the deals in parallel.

Nissan wants to ensure that key internal-combustion and hybrid technology it owns is protected in any deal Renault strikes with Geely, two of the people said.

In addition, the separate question of potential technology transfers to a Chinese company needs to be treated cautiously, they said.

The sources were not authorized to speak to media and declined to be identified.

The three automakers declined to comment.
 

Talks between Renault and Geely have made progress after negotiations in London last month, one of the three people familiar with the matter said, without providing details.

Geely CEO Daniel Li had been in London for those negotiations but has since returned to China, that person said.

Geely, which owns Volvo and a 9.7 percent stake in Daimler, could take a significant and potentially controlling stake in the gasoline-car business, sources have previously said.

Discussions between Renault and Nissan were underway in Paris last week and de Meo and his Nissan counterpart, Makoto Uchida, have been talking every weekend, Uchida told Reuters last week.

Nissan's concerns about technology rights have also been one reason why it has yet to reach a preliminary agreement to invest in Ampere. It has unresolved questions about the rights to intellectual property for cutting-edge technology like solid-state batteries, people familiar with those talks have said.

Discussions have included the need to ensure that any technology transferred to Ampere stays within the EV unit, two people said.

Uchida said Nissan was aiming for a restructured and “equal partnership” that would strengthen the competitiveness of both in the transition to electric vehicles.

Renault has a 43 percent stake in Nissan while the Japanese automaker has a 15 percent non-voting stake in Renault. People with knowledge of the talks have said the two sides have been discussing a reduction in Renault's stake in Nissan, potentially to 15 percent.

The Renault-Nissan alliance, which includes Mitsubishi Motors as a junior partner, announced plans in January to invest a combined $26 billion in electrification.

That combined investment is still only half of what larger rival Volkswagen Group has committed.

Uchida said a deal with Renault that would optimize shared investment was important because the scale of the alliance's investment was still less than what was planned by what he called “a giant OEM.”

He did not mention the original equipment manufacturer by name.

Uchida also said Nissan wanted to see a “fair treatment” of its interests in any new partnership Renault strikes with Geely. The shift to electric vehicles is happening at different speeds in China, the U.S. and Europe, he said.