Nissan shares gain 2% on Tuesday after overhaul of alliance with Renault

The shares of Nissan Motor Co Ltd (7201) surged in Tokyo on Tuesday, while those of Renault SA (RENA) closed lower in Paris on Monday, after the two companies announced an overhaul of their alliance, which has until now put them on an unequal footing.

Under the new agreement, which the two auto makers announced on January 30th, Nissan and Renault will hold 15% stakes in each other and Nissan will be able to exercise voting rights with its stake.

Previously, the French company held about 43% of Nissan and the Japanese company did not have voting rights.

“The normalisation of the capital relationship will raise the amount of freedom Nissan has in terms of management, making it easier to adopt a strategy that focuses on the United States, China and emerging markets,” Masayuki Kubota, chief strategist at Rakuten Securities, was quoted as saying by Reuters.

Under the new deal, Renault will have to put about 28% of its Nissan stake in a French trust. It also includes a lock-up, which prevents stock sales for a particular period, and a standstill obligation, which brings other restrictions on a share sale.

The shares of Nissan Motor closed 2.07% (JPY 9.4) higher on Tuesday at JPY 463.3.

The shares of Renault SA closed 4.12% (EUR 1.58) lower on Monday at EUR 36.63. They were last up 0.11% to trade at EUR 36.67 during Tuesday’s session.