Renault paid $3.5B for a third of Nissan — and got a 20-year headache

In the late 1990s, Nissan was in crisis. The Japanese carmaker had accumulated $20 billion in debt, had no new models, and was losing money in every market except Japan. In March 1999, Renault — the French state-owned carmaker — agreed to acquire a 36.8% stake in Nissan for $3.5 billion. Renault sent Carlos Ghosn, a French-Lebanese-Brazilian executive who had turned around Renault's Belgian plant, to lead Nissan's recovery.

Ghosn's turnaround is a celebrated business story. He cut costs ruthlessly, closed factories, sold non-core assets, and launched the Nissan Revival Plan. By 2001, Nissan was profitable again. The alliance deepened: Renault increased its stake to 43.4% with voting rights, while Nissan took a 15% stake in Renault — without voting rights. This asymmetric structure was written into the deal from the start. Renault, the smaller company by revenue, had voting control over the larger one.

For two decades, the imbalance was held in check by Ghosn, who became CEO of Nissan in 2001 and CEO of Renault in 2005. He ran both companies as a single entity. The alliance became the world's largest automotive partnership, with combined sales of 10.6 million vehicles in 2017. But the imbalance was a ticking bomb. Nissan executives resented that a company with half their revenue had voting control over them. The resentment grew as Nissan's profits far exceeded Renault's.

When Ghosn was arrested in Tokyo in November 2018, the alliance nearly collapsed. The 2023 restructuring finally fixed the imbalance: Renault reduced its stake to 15% and Nissan gained voting rights. The deal that the auto trade still talks about is the 1999 rescue — and the structural flaw that nearly sank it 20 years later.