Nissan Will Buy Back 5% Of Its Own Shares From Partner Renault

Nissan Motor Co., Ltd. declared that it will buy 195,473,600 shares of its own stock from Renault S.A. in a strategic move to boost capital efficiency and shareholder returns. The acquisition cost about 79.85 billion yen and accounts for 5.03% of Nissan's total share count, excluding treasury shares, all of which will be cancelled on October 3, 2024.
The deal is the result of Nissan utilizing its right of first offer under the terms of the New Alliance Agreement between the two companies and Renault's offer to sell the shares held in a French trust.

The transaction, which will be funded by Nissan's net cash position and executed through The Tokyo Stock Exchange's off-auction share repurchase trading system, will assist Renault in paying down its debts and regaining its investment grade credit rating.
According to a press release from Renault, the sale of shares to Nissan is expected to cause a capital loss of 1.1 billion euros because the value of the stake is less than what was previously stated on the company's balance sheet.
The company's operating income won't be impacted by this because it will be recorded in other operating income and expenses. There would also be a recorded capital loss on disposal of up to 120 million euros.
January of last year saw the long-standing partnership between Renault and Nissan restructured, with the French company reducing its stake in the Japanese company to 15%.

As per the agreement, Renault will give a French trust 28.4% of its shares in the company based in Yokohama. Nissan stated in a statement that while Renault will continue to profit financially from the shares unless they are sold, voting rights for that stake will be "neutralized" for the majority of decisions. By means of a cross-shareholding agreement, Renault and Nissan will each keep a 15% stake, along with voting rights, in each other's companies. Prior to this, Nissan owned roughly 43% of Nissan, while Renault owned a 15% non-voting stake in the French business.