H-MBA CNAM • Negotiations • March 2015

Case Study :
The merger between Renault and
Nissan
Benoît Lamarsaude∗
H-MBA H1, Conservatoire National des Arts et Métiers

Abstract

This paper describes the negotiations to form the Renault-Nissan alliance. Many observers doubted that
the companies would reach agreement in 1999, let alone develop a partnership lauded throughout the auto
industry fifteen years later. Firstly, the analysis focus on the key elements of this negotiation, developing
the three dimensions: who?, what? and how?. Secondly the conduct of negotiations ,from the first contact
of the two companies to the signed agreement, is described and discussed. Finally, as a conclusion, this
paper ends on the learning we can pull from this case.

I. Introduction The alliances race This race to gigantism

seems irresistible. Toyota bought Daihatsu, an
another Japanese carmaker, Volkswagen looks
Automotive environment From the mid 90s,
aside BMW, Ford (which has already recovered
world auto sales had been flat. In May 1998,
Volvo, Jaguar and Mazda) and General Motors
the announcement of the "wedding" between
(GM) looking for opportunities in Asian manu-
the German Daimler (Mercedes) and the Amer-
facturers. And the story does not advocate for
ican Chrysler has been a bombshell. A monster
small manufacturers. Europe had 50 manufac-
is born: e83 billion in revenue. This merger be-
turers in 1945 against fifteen in the late 90s in
tween two industry giants illustrates perfectly
France, the slaughter was even more impres-
the race to the size that shakes the car. In re-
sive: 300 manufacturers in 1914, 30 in 1945,
cent years, in fact, fashion is the "big one is
3 in 1975 (Matra, PSA, Renault) to this time
more better you will feel." For consumers, the
there. The future of these "small" builders may
news is pretty good. Who says said concen-
seem even darker than a new wave from the
tration economies of scale, productivity gains
East is preparing. To compensate for the col-
and lower prices. "The cars have never been
lapse of their domestic markets, Japanese and
so well equipped and also cheap. In the fu-
Korean have made Western Europe a prime
ture, the driver will always be better value for
target. With 34 factories in 25 countries, Toyota
money, "said in 1998 Jean-Marc Nicolle, Direc-
is the leader of this offensive. The Japanese
tor of the PSA Strategy. The new Peugeot 206
went on the attack. In terms of innovation on
is equipped as standard with airbags, an immo-
the one hand, with the launch of the Prius,
bilizer and steering for a price less than 11,000
the first car "hybrid" combining two engines,
euros. There are still 4 years, these facilities
one petrol and one electric. In terms of the
were reserved for luxury sedans. Similarly, the
other internationalization, with an impressive
Renault Twingo 2 has 15% more equipment
breakthrough in the United States and major
than the previous model and costs about 10%
projects in Europe (already with factories in
less. Finally the price of MPVs dropped in two
Britain and France, in Valenciennes). Cham-
years nearly 20%.
∗ Contact : benoit.lamarsaude@gmail.com

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 H-MBA CNAM • Negotiations • March 2015

pion of production management, Toyota is still II. Key elements of the

trying to produce cheaper and faster than oth- negotiation - Who?
ers. Thus, the last Corolla has an engine with
23% fewer parts than previous generation. 25% 1. Relationship
lighter, the engine also consumes 5% less fuel
and costs 10% less. In the future, the Japanese Alliance’s offeror : Renault Renault S.A.
group still hopes to reduce by 30% the cost of produced a full range of cars, commercial ve-
reducing its models from 12 to 7 the number hicles and parts. The 2nd largest automaker
of platforms (chassis-wheel-drives). in France, and 10th largest in the world, Re-
nault employed over 138,000 employees and
generated e31.7 billion in revenue in 1997. The
100-year old company had grown significantly
after World War II but fell into a deep finan-
Why grow? In the automotive industry, fixed
cial crisis in the early 1980s. After 6 years of
costs, both in terms of purchases of research
“shock treatment” involving plant closings, lay-
become exorbitant. In Europe, the design of
offs and divestitures, and a repeat round of
a new engine costing 800 million. The large
cost- reductions in 1997, the transformed com-
manufacturers with several brands can better
pany had in many ways turned the corner. At
negotiate with suppliers and dampen their re-
the same time, the French government, which
search on 500 000 or 600 000 vehicles, while
reduced its majority equity share in 1996, still
an average manufacturer must absorb 100 000
owned 44.2% of Renault, and the company re-
or 200 000. For example, each year Mercedes
mained heavily dependent on its home and
and Chrysler together to buy 50 billion. If they
nearby European markets.
succeed, as they wish, obtain 5-10 % discount
Renault’s président directeur général (ef-
from each subcontractor, it is between 2.5 and
fectively, the Chair- man and CEO) was Louis
5 billion they will manage to save money! For
Schweitzer. He had joined the company as
a manufacturer, grow to another interest: allow
Chief Financial Officer in 1986, after serving
it to diversify geographically. Whereas in 1998,
in the French ministries of finance and indus-
Renault and Peugeot for almost 80% of their
try, and played a central role in Renault’s his-
sales in Western Europe, Ford and GM, predict-
toric restructuring. Appointed CEO in 1992, he
ing a future economic downturn in the North
was 4 years into his term when he ordered the
American market, began to play predators in
1997 round of cost reductions. While the move
Asia.
was controversial, Schweitzer was later cred-
ited with restoring the company’s reputation.

The ideal partner: Nissan Nissan Motor

The trigger In 1998, Renault was in better
shape than it had been for decades but its po-
sition in the world auto industry was still pre-
carious. Then in May, two major automakers,
Daimler and Chrysler, announced a “mega-
merger”. That event shook Renault’s top man-
agement into deeply questioning their com-
pany’s future.
In June 1998, a month after the Daimler-
Chrysler announcement, Renault approach sev-
eral asiatic car-makers with the goal of an al-
liance.
was Japan’s 2nd largest automaker. The
internationally-oriented firm had production
sites in 22 countries and sales in over 180. Nis-
san spearheaded the Nissan Group which com-
prised hundreds of subsidiaries and employed
130,000 people. With this workforce, the Group
achieved substantially more than Renault in
consolidated net sales: e50 billion in 1998. A
proud, 90-year-old organization, Nissan had
a longstanding reputation for engineering ex-
cellence. But in 1998, the company was floun-
dering competitively, burdened by debt, and

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 H-MBA CNAM • Negotiations • March 2015
losing money for the fifth time in 6 years.
Nissan had been the top Japanese au-
tomaker in the U.S. and top Asian automaker
in Europe for decades, yet it had lost both po-
sitions by 1998. It held only 5% of the U.S.
market. Customers and analysts perceived Nis-
san vehicles as dull and expensive. Beyond
the red ink on its bottom line, Nissan suffered
from a debt burden represented by a 5 to 1
debt-equity ratio. The company had to cover
approximately e30 billion in current liabilities
by March 1999. On top of these problems, its
business environment at home presented vari-
ous constraints and challenges for operations,
including a virtually sacrosanct commitment
to lifetime employment.
2. Mandate
As is typical of high-stakes corporate negotia-
tions, the number of direct participants in the
Renault-Nissan talks started small — less than
10 on each side — and grew as the discussions
intensified. The two CEOs formally initiated
the talks and remained engaged throughout
the process. The Deputy General Manager
of International Operations Georges Douin,
who spearheaded the advance work for the
CEOs’ first meeting, served as chief negotia-
tor of Renault’s four-person team. Nissan’s
three-person negotiation team included Gen-
eral Manager of Corporate Planning Yutaka
Suzuki.
Both executive teams were advised by in-
vestment bankers: Merrill Lynch for Renault,
Salomon Smith Barney for Nissan. Internal spe-
cialists supported the negotiation teams. Three
months into the negotiations, the teams drew
120 resource personnel from their companies
and organized joint teams to study specific
areas of company operations in detail. The
number of actors and arenas in such an under-
taking is difficult to grasp and track without
what a relationship map.
Figure 1 depicts direct participants, staff,
stakeholders, and other relevant parties ev-
ident in January 1999, a little over halfway
through the negotiations. It illustrates the com-
plexity of the negotiation and provides a guide
for the play-by-play account in the next section.
Renault Renault’s Board of Directors had to
authorize any major strategic initiative and for-
mal agreement. French and European Union
labor laws required companies to inform and
consult employees on important decisions,
which entailed communication with the Work
Council. Roughly 60% of Renault’s workforce
was represented by six activist unions, the
largest being the Confédération Générale du
Travail (CGT). Only 15 months before his let-
ter to Hanawa, Schweitzer had faced a multi-
country strike prompted by the closing of Re-
nault’s plant in Vilvoorde, Belgium.
The French government, led by a Social-
ist prime minister, was involved via multiple
regulatory roles and as part-owner of Renault.
The Treasury Department oversaw this stake.
Though not a majority stake in financial terms,
it was a “golden share” that gave the govern-
ment veto power over board decisions.
Nissan On the right side of Figure 1, Nissan’s
largest shareholders and creditors in the Fuyo
keiretsu were Fuji Bank, Industrial Bank of
Japan, and Dai-Ichi Mutual Insurance. Nissan
Roren, the largest labor union at Nissan, had
clashed with management intensely through-
out the company’s history. Lastly, three min-
istries in the Japanese government could influ-
ence Nissan, as they did most Japanese busi-
ness: the Ministry of International Trade and
Industry (MITI), Ministry of Finance, and Fair
Trade Commission (FTC).
At the bottom of the figure, additional play-
ers include automakers that could affect the
Renault-Nissan negotiations. In July 1998, af-
ter nearly a year of talks through Daimler-
Benz, DaimlerChrysler concluded an agree-
ment with Nissan Diesel to co-produce a light
truck. Hanawa subsequently talked to Daimler-
Chrysler co-CEO Jurgen Schrempp and to Ford
CEO Jacques Nassar, but let us return to the
Renault-Nissan story before we take up these
encounters.
3
 b1120 Negotiation Excellence

H-MBA CNAM • Negotiations • March 2015

324 S. E. Weiss

FIGURE 1 Parties
Figure 1:and linkages
Relationship in January 1999
mapping

III. Key elements of the While Schweitzer’s predecessors had targeted

negotiation - What? volume and profit, he wanted to shift the cor-
parties evident in January 1999, porate a littlefocusover halfway
to quality. He was through
also deter-
1. the negotiations. While not every germane actor appears in R&D
Motivations mined to shrink Renault’s 36-month the cy-
cle to the 24-month cycle common in Japan.
figureSchweitzer
Renault (e.g., European
and his teamUnion
identifiedCompetition Bureau), it illustrates
Renault had no presence in the U.S. market,
thekey
several complexity ofcompany:
interests for the the negotiationwhich andrepresented
provides23% a ofguide
the worldfortotal,
theand
•play-by-play
improved globalaccount in the next section.
competitiveness in qual- had either no reputation or a poor one in Asia
ity, cost and delivery and other non- European markets. Schweitzer
To consider these actors, albeitfeltbriefly, the companylet us start
could on the
capitalize left
on its inno-
•side of theinternationalization
accelerated figure. Renault’s Boardvativeness
of the of Directorsin producthad to authorize
design. Some interests
company
any major strategic initiative and were formal interconnected.
agreement. For example,
Frenchachieving
and
• critical mass within the global auto in- critical mass would work both to improve com-
European
dustry
Union labor laws required companies
petitiveness to attacks
and fend off inform fromand
hostile
consult employees on important decisions, acquirers. Thewhich entailed
Renault CEO com-over
had presided
• a worldwide reputation for product inno- the unconsummated — some say “failed” —
munication
vation with the Work Council. Roughly 60% of Renault’s
merger negotiations with Volvo in 1989–1993.
workforce was represented by six activist
• protecting domestic market share
As a matter unions, the interest,
of personal largesthebeing certainly
the Confédération Générale du Travail (CGT).
had no desire Only
to repeat that15 months
experience.
• continued momentum as a revived enter-
before
prise his letter to Hanawa, Schweitzer had faced a multi-country
strike prompted by the closing of Renault’s plant in Vilvoorde,
4 Belgium.

NEGOTIATION EXCELLENCE - Successful Deal Making

 H-MBA CNAM • Negotiations • March 2015
Nissan The president of Nissan Motor,
Yoshikazu Hanawa, had been appointed to his
position (effectively CEO) in June 1996. Hav-
ing spent 40 years at Nissan, he was a dedi-
cated “company man” but also a strong-willed
leader. He had a personal interest in seeing
his company recover and pull out of its current
condition. He sees the alliance how to solve
the questions it faces:
• debt relief
• protecting the Nissan identity and brand
• returning to profitability
• reestablishing a strong position in the crit-
ical U.S. market
• improving its competitiveness in Asia
and Europe
• ensuring the company’s long-term health
• preserving jobs
• developing an effective solution for debt-
ridden Nissan Diesel 1
2. Options on the table
Renault Renault had two main strategic op-
tions: “go it alone” or join another major au-
tomaker. Renault held sufficient cash reserves
to fund its own entry into the U.S. and could
continue to enter limited-scope agreements
with small automakers to plug operational de-
ficiencies. However, these measures would nei-
ther accelerate internationalization nor create
sufficient scale in a short time horizon.
With respect to a major partnership, Re-
nault did not have much to offer any of the
world’s Top Five (GM, Ford, Toyota, VW and
DaimlerChrysler). Schweitzer and his team
drew up a list of potential Korean and Japanese
partners but soon decided that the Korean com-
panies had little to offer Renault. The team
concentrated on Japanese firms.
1 Nissan Diesel was a truck and bus manufacturer in which Nissan Motor held a 39.8% share.
Nissan To pursue Nissan’s interests, Hanawa
had few appealing courses of action in June
1998. Additional borrowing from commercial
banks would have been costly due to Nissan’s
low credit rating, issuing additional equity or
selling shares to raise capital would be ill-timed
since shares had depreciated by 50past year,
and spinning off Nissan Diesel and other sub-
sidiaries would not raise sufficient cash. Be-
sides, these options would only satisfy cred-
itors and not address fundamental strategic
imperatives.
With respect to potential partners, the large
Japanese automakers — arch-rival Toyota and
Honda — probably viewed Nissan as undesir-
able, and smaller Japanese companies could
not afford or digest a large firm. Meanwhile,
the American majors GM and Ford were al-
ready allied with Toyota and Mazda, respec-
tively. Ford had collaborated with Nissan in a
limited way on a mini-van project but was, by
this point, actually managing Mazda.
These conditions left Hanawa with the op-
tion of an internally led restructuring based on
the Nissan Corporate Planning Department’s 1-
month old “Global Business Reform Plan” and
short-term assistance from fellow members of
Nissan’s industrial group, the Fuyo keiretsu.
Given the scale and scope of Nissan’s needs,
this was a rather weak option.
3. Batna
Renault Schweitzer has sent a similar al-
liance proposal to Mitsubishi, albeit in negotia-
tion with Volvo. Then he can come back them
if the deal with Nissan do not not succeed.
But it is a risky backup plan: Renault had
no discussion with the manufacturer and noth-
ing says it will accept an alliance.
Nissan Nissan can find a partnership to
reaching his objective of saving the firm with
DaimlerChrisler.
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 H-MBA CNAM • Negotiations • March 2015
4. Legitimacy and principles
From the first discussions, both companies de-
viate the option of the merger and agree that
it will be an alliance with a possible taking
reciprocal participation. This alliance must be
global in scope.
Whatever the basic relationship, manage-
ment control and equity valuations were bound
to be sensitive issues. Given Nissan’s history
and prominence in Japan’s industrial sector,
Hanawa and his team would be protective of
the company and determined to ensure that
Nissan Motor had a future. At the same time,
while Renault had $2 billion in cash to spend,
the company’s financial history and govern-
ment supervision necessitated that Schweitzer
proceed prudently.
IV. Key elements of the
negotiation - How?
The Figure 2 shows the different phases of the
negotiation processes and the mean of commu-
nication encountered in this negotiation. The
two next sections describe them in more de-
tails.
1. Process
Firstly the two CEO exchange a few letters
from June since their first physical meeting in
July. An exclusive negotiation agreement is
reached quickly.
Secondly, working groups studying the pos-
sible synergies between the two companies. At
the end of the period of ten weeks, the results
being promising, a calendar of trading is de-
fined and and to respect an exclusive agree-
ment until December 23: The September memo-
randum.
During this period of 3½ months, the two
car-makers will study the benefits and feasi-
bility of the alliance. Then both companies
explore in more depth, so the reciprocal proce-
dures, necks data, etc. In this phase, the leaders
kept watch especially that information flows
smoothly.
6
At the end of the period defined by the
memorandum, the two CEOs signed a block-
ing clause, which provides that Renault has
to make an offer to Nissan by March 31. Dur-
ing the two months that followed, the discus-
sions between Nissan and DaimlerChrisler in-
tensified. When exchanges between Nissan
and DaimlerChrisler stopped in mid-February
Schweitzer reiterated its offer confidential, ut-
tering that Renaut was ready to invested more
money. Hanawa accepts and signs an agree-
ment blocking agreement.
The last period of the negotiations, as the
shortest, was the most intense, where the price
issue became critical. Before beginning the
financial négocations, Scweitzer need to get ap-
proval from its board of administration and the
works council. After discussion on the price,
the final agreement was found eleven days later
on 27 March.
2. Communication
During the negotiation period, various means
of communication were used. First, Renault
has manifested from Nissan using the mail.
Thereafter physical meetings were held,
and at different levels:
• Directly between the two CEOs at their
various appointments.
• Between the teams to explore opportuni-
ties for synergies. They related only to
the negotiators of projects.
• Via corporate governance bodies: Re-
nault comes the board of directors of Nis-
san.
Each one, has publicly disclosed via press
release to make announcement effects, and si-
multaneously Renault used confidential mes-
sages in order to advance the negotiations.
3. Pratical aspects
Cultural aspects The Japanese and European
culture are different. On the one hand lan-
guage barrier, but more generally, communi-
cation differs completely. Also, to understand
 H-MBA CNAM • Negotiations • March 2015

June 1998

July 1998 Process step Communication

August 1998
Approach Letters followed by a
September 1998 CEOs meeting. Secret
group to prepare meeting.

October 1998
Preliminary analysis Working groups conducted
preliminary analyses on purchas-
November 1998 ing, engines and gearboxes, car
platforms, production, distribu-
tion, and international markets
December 1998

January 1999 Evaluate synergy September memorandum. 21

inter-company study teams exam-
ined the companies’ respective
February 1999 operations. 12 CEO meetings.

March 1999 Negotiation Renault project’s public an-

nouncement. Nissan discuss with
April 1999 DaimlerChrisler. Renault’s CEO
sends an offer via a confidential
message to Nissan’s CEO .

Conluding Approval of the board of ad-

ministration and the Renault
works council. Public and
press release. Price discussion.

Figure 2: Timeline of the alliance negotiation process.

the reactions of others and communicate effec-
tively and convey his ideas, it is necessary to
soak up the culture.
In order to better understanding and devel-
oping empathy towards Nissan’s teams, Carlos
Goshn and his team began to take Japanese
daily courses as early as October 1998.
Inter company exchanges At the third stage,
the review teams of both sides the respective
operation of Renault and Nissan. The teams
visited factories, met on almost every corporate
sites worldwide and exchanged information
specific to each company.
To ensure that communication takes place
without a hitch, management interfered in the
work of study groups to facilitate collaboration
when it was necessary and a coordinating com-
mittee examined each month ongoing work.

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 H-MBA CNAM • Negotiations • March 2015
V. Conduct of negotiations
From the start, Schweitzer was considering an
alliance, a "delicate balance" between the two
companies had categorically rejected the idea
of an acquisition or merger.
During the second part of the negotiations,
group work demonstrated genuine comple-
mentarity between the two manufacturers. A
a result, the two CEOs signed the September
memorandum to an exclusive agreement until
December 23.
In the third step that followed, at the top
of the hierarchy, the concern principal during
this period was to develop a business strat-
egy; financial issues were kept for last. At
Renault, Schweitzer and his negotiating team
were trying to clarify what they meant by
covenant. They were inspired by their expe-
rience with Volvo. They carefully examined
the Ford-Mazda fusion as a model, leaning
especially on the financial and cultural aspects.
By October, the negotiations focused on Re-
nault’s investment in Nissan and Schweitzer
received the approval of the French govern-
ment about the alliance. Meanwhile, Hanawa
had set four preconditions for an agreement:
maintaining the Nissan name, job protection,
support for organizational restructuring effort
undertaken by Nissan leaving him in charge
of the initiative and the selection a CEO in
Nissan’s ranks
In mid-November, the Board of Directors of
Nissan invited Schweitzer, Douin and Ghosn
in Tokyo for them to present their vision of the
alliance. The presentation went well and the
Renault team had the feeling of having taken
a step. But Hanawa was still actively engaged
in the search for other partners. Among other
things, he spoke to the CEO of Ford, who did
not want to follow.
Soon after, Hanawa called the co-CEO of
the new company DaimlerChrysler, which
proposed an outright investment in Nissan
Automobile. Hanawa Schweitzer warned
that he intended to respond to the offer of
Schrempp. However, continued negotiations
with Schweitzer.
8
During the months that followed, the
Renault-Nissan negotiating teams found them-
selves at an impasse regarding the legal status
of the relationship. Renault had suggested a
subsidiary or a joint venture. Nissan wanted
neither the one nor the other. Ghosn inter-
vened and offered an unofficial alternative that
was accepted.
Later, in December, as they reached the
target date of the press release of September
Schweitzer and Hanawa negotiated, among
others, a blocking clause. Hanawa was not
quite ready to commit. 23, the two CEOs have
signed a declaration of intent, unless a block-
ing clause, that would bid Renault Nissan Au-
tomotive by 31 March 1999. Hanawa asked
Schweitzer to include Nissan Diesel in its offer.
At the fourth stage of negotiations, public
announcements négocaitions between Nissan,
Renault and DaimlerChrysler were announced.
Nissan took advantage of its discussion with
the latter as bargaining power with Renault.
They announced their preference for Daimler-
Chrysler than Renault.
Monetary contribution of Renault was a dif-
ficult question to the agenda of Renault-Nissan.
Nissan asked six billion dollars. Renault had
initially expressed interest for a 20% stake. If
the Nissan value was between e8 billion and
e11 billion, 20% did not bring in more than
e2.2 billion. Renault quickly went up 35%, but
had no intention to reach 40% from what Re-
nault would have been forced to consolidate
debt from Nissan.
In mid-March the circumstances became
very favorable for Renault when Daimler-
Chrysler officially withdrew its offer for Nissan
Automobile. Hanawa yet probed the CEO of
Ford for an association but without success.
Schweitzer realized that the only option left
was the alliance with Renault. The team of
Schweitzer reiterated the terms of its existing
offer. He did not lower his bet, after the depar-
ture of DaimlerChrysler, to remain consistent
in its approach. Schweitzer wanted to estab-
lish a genuine relationship with Nissan and it
did not take that Hanawa fear that Renault is
trying to exploit the situation. It was at this
 H-MBA CNAM • Negotiations • March 2015
time that Schweitzer sent the following mes-
sage to confidential Hanawa: "There is hope that
Renault is able to invest an amount greater than
had been proposed before". Instead of specifying
the amount, Schweitzer asked Hanawa to trust
him, but insisted on a lock-up agreement they
signed on 13 March.
On 16 March, the start of the fifth stage of
the negotiations, Schweitzer obtained from Re-
nault’s board and the works council internal
approval he needed (Renault Communication,
1999). These decisions were entered on a par-
ticipation of 35% to e3.9 billion. Negotiations
with Nissan intensified, and in the final agree-
ment, reached 11 days later, the investment had
increased by 20% to e4.8 billion for 36.8% in
Nissan Automobile and participation in other
Nissan entities.
The "global partnership agreement" signed
by Schweitzer and Hanawa March 27, 1999
described an alliance in which Renault and
Nissan would cooperate to achieve certain syn-
ergies while maintaining their respective brand
names. Management Strategic of this associ-
ation would be set by a global alliance com-
mittee co-chaired by the CEO of Renault and
his counterpart at Nissan and consists of five
members from each company. Financial terms
indicated that Renault invested e4.8 billion in
Nissan. Renault received a 36.8% equity stake
in Nissan Motor and half of the shares in Nis-
san Diesel Nissan Automobile. Renault also
acquired financial subsidiaries of Nissan in Eu-
rope.
The agreement gave Renault the option to
increase its stake in Nissan Motor and Nis-
san that of acquiring a stake in Renault. Re-
garding personnel, Renault was responsible for
three positions at Nissan (the General Man-
ager, the General Manager Deputy product
planning & strategy and Chief Financial Offi-
cer Deputy). A seat on Renault’s board was
reserved for Hanawa. At the level of the al-
liance, a "Global Alliance Committee" and op-
erational cross work-groups comprising mem-
bers of both companies, were set up to work in
key areas of synergy.
VI. Conclusion
On benefits of the agreement We can there-
fore consider the final agreement between Re-
nault and Nissan, and compare the terms
with Renault’s interests. The structure of the
covenant binds the two companies to such a
degree that they can be considered as a sin-
gle competitor that would have the critical size
considered vital by Schweitzer.
Commitment to find synergies and coor-
dinate market perfectly matches his interest
increased competitiveness and greater interna-
tionalization. For cons, the price that Renault
has agreed to pay for participation in the capi-
tal of Nissan guess Nissan enjoys a value close
to that which was calculated from compara-
ble companies already mentioned; this clearly
favors Nissan.
On the conduct of negotiation Renault has
advanced in trade with Nissan starting with
demonstrate the benefits of the synergy be-
tween the companies. Aware that Nissan
wanted keep his own entity, it had the intelli-
gence to propose a method of governance that
left the Nissan independence while remaining
in a synergistic approach. The French com-
pany that pushed the financial issues and not
wishing to address first, this was a strong sign
that the alliance was not based on an actual
payment but future benefits from the comple-
mentarity of the two actors. We can say that Re-
nault’s trading approach was essentially based
on a seductive approach of the merits of the
Alliance.
Nissan took a more opportunistic approach.
His first need was to save the company by cash
contribution, but also think about the future.
Following the initial analysis of the alliance,
Nissan has seen the benefits it could draw and
understood that his avenr passing by. Having
been asked by Renault, Nissan nevertheless
wished to know if there was a better offering.
Although the approaches to Ford and Daim-
lerChrysler have no leads, this has had the
effect of recall his previous failure to Renault
Alliance with Volvo a few years earlier. And at
9
 H-MBA CNAM • Negotiations • March 2015
the same a good way to negotiate the financial
terms of the alliance!
15 years later Today looking at the position
of both companies, we can conclude that the
terms of the agreement were relevant, as the
two companies we pulled each of benefits there-
after.
Between 2005 and 2014, sales of Renault
Nissan rose 38.7%. A remarkable achievement
given the scale of the crisis which prevailed
in the global automotive industry in 2008 and
2009. Thanks to the two partners, the group
holds significant positions in all geographic ar-
eas. Renault is so strong in Europe and South
America. Nissan is obviously very present in
Japan but also in China and the United States.
With 8.47 million vehicles sold in 2014, the
Renault-Nissan alliance ranks fourth in the
world behind the Japanese Toyota , the Ger-
man Volkswagen and the American General
Motors.
In 2014, 62% of vehicles sold by the
covenant are Nissan or Infiniti, the premium
brand of the Japanese manufacturer. Renault
weighs only 32% of the whole. There decade,
the ratio was different, since 2005 Renault
weighed 41.3% of overall sales. Over the period,
10
sales of the diamond brand have nevertheless
increased - slightly - 7%. The dynamism of
Nissan was incommensurate with a surge of
more than 47%. The Japanese automaker has
benefited from its presence in the Chinese and
American markets, where the bulk of global
growth has occurred.
References
Benoliel, Michael (2011). Negotiation Excellence:
Successful Deal Making. World Scientific.
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Blanchot, Fabien and Michel Kalika (2002).
“L’alliance Renault-Nissan”. In: Cas Multi-
média, CCMP.
Donnelly, Tom, David Morris, and Tim Don-
nelly (2005). “Renault-Nissan: a marriage
of necessity?” In: European Business Review
17.5, pp. 428–440.
Masclef, Olivier (2012). “Altruisme et dons
gratuits dans une dynamique d’émergence
d’alliance. Le cas Renault-Nissan”. In: Revue
française de gestion 4, pp. 123–135.
Weiss, Stephen, Christian Marjollet, and Cyril
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