The Japanese company’s commitment to the Ampere spin-off could cost it 1.5 billion, which would take away its firepower
Renault and its partner Nissan confirmed on Monday that the Japanese giant will buy up to 15% of Ampere, the future Renault spin-off dedicated to electric cars. This figure will get all the attention, since last week, Nissan had declared without commitment that it “aspires to become a strategic shareholder”, which left many options on the table.
The significant size of the investment will help crystallize a valuation for the new business at a time when multiples for electric car companies are less extravagant than in the past. This should please Renault shareholders.
However, it suggests they will have to wait a long time to benefit from Renault’s planned sale of Nissan’s 28.4% stake that will be parked in a non-voting fund. The sale was necessary to reduce Renault’s voting rights in its partner to 15%, the same level as the Japanese company’s stake in its own capital.
Nissan’s commitment to Ampere could cost 1.5 billion euros at a valuation of 10 billion: that would leave the Japanese group, whose car unit has seen its net cash shrink by about 30% since 2018, with less power from fire for a buyback. Since the agreement also stipulates that there will be no fixed timetable for the transaction, it could take time to arrive.
