Renault limited to 44.4% stake in Nissan under agreement, filing shows

Nissan Motor Co. Ltd. on Thursday gave some details of its two-decade-old alliance agreement with top shareholder Renault SA for the first time, revealing the French automaker cannot unilaterally increase its stake beyond 44.4%.

In an annual securities report, Nissan said Renault cannot raise its stake without Nissan`s permission except in cases such as if another entity bids for the Japanese automaker.

Renault`s stake is around 43%. Nissan owns 15% of Renault but without voting rights.

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This is the first time Nissan has revealed details of the so-called Restated Alliance Master Agreement, though Renault has previously disclosed elements. Their relationship has been a source of tension in Japan where it is widely seen as unequal.

The filing showed Nissan is allowed to acquire an additional stake in Renault if the French automaker makes a shareholder proposal that Nissan`s board does not support.

The Japanese automaker can also increase its stake if Renault does not support its proposal for a Nissan board member selection, the filing showed.

Thursday`s disclosure came after a shareholder proposal to make the alliance agreement public was voted down at Nissan`s annual general meeting this week.

Nissan said it would disclose the agreement by Thursday to the extent it did not violate confidentiality obligations.

Shares of Nissan were down 2.8% at 533.5 yen, underperforming the Nikkei 225 average, which was down 1.3%.