No Renault deal by year-end as some at Nissan urge caution -sources

By Maki Shiraki, Gilles Guillaume and David Dolan

TOKYO/PARIS (Reuters) - Nissan (OTC:NSANY) Motor Co Ltd doesn't expect to reach an agreement with top shareholder Renault (EPA:RENA) by year-end on retooling their alliance as some of the Japanese automaker's board members are pushing to move cautiously, people familiar with the matter said. France's Renault SA (OTC:RNLSY) wants Nissan to invest in a new electric-vehicle unit it plans to spin off as part of a major overhaul. Nissan wants Renault to sell some of its roughly 43% in the Japanese company to put the two carmakers on more equal footing, Reuters has previously reported.

The two-month-old talks, which continue, now look likely to run into the new year, four people said, speaking on condition of anonymity. The delay comes as some Nissan board members have emphasised a need to move carefully and are particularly concerned about the transfer of intellectual property, two of the people said.

There was some opposition from the board at the start of this month to the idea of closing the deal by year-end, one of the people added. Some members said that rushing to close the deal before addressing concerns - including on technology sharing - would fail to build on efforts to improve governance that followed the ouster of former alliance chairman Carlos Ghosn, the person said. Japan's powerful trade ministry also doesn't want to see a deal pushed through prematurely, another of the sources said.

Nissan and Renault declined to comment. No one was immediately available for comment at Japan's Ministry of Economy, Trade and Industry.

For Renault, any delay in Nissan talks risks slowing CEO Luca de Meo's timetable for the reboot he has promised investors. His sweeping plan includes a separate, pending deal with China's Geely Automobile Holdings (OTC:GELYF) Ltd to carve out Renault's petrol engine business. The sharing of technology had emerged as a sticking point in the Renault-Nissan talks, Reuters reported in October.

SORE POINT

The relationship between Nissan and Renault has long had political overtones. The French government is Renault's biggest shareholder. The French trade ministry declined to comment.

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With Nissan holding only 15% of Renault - and without voting rights - French dominance of the alliance has long been a sore point in Japan. Many Nissan executives see the relationship as unbalanced, especially regarding product development.

Reuters reported this month that the automakers would delay announcing the deal on Dec. 7 as they struggled to bridge their differences. That raised the prospect of an announcement by the end of this month, which now also appears unlikely. Renault has seemed more keen to seal the deal, sources have said. The scale of Renault's planned overhaul has also raised questions about how the alliance will function in practice. Renault plans to separate itself into five businesses, deepen ties with Geely as well as work with partners as diverse as Airbus on batteries and Google (NASDAQ:GOOGL) on product design and development. Nissan CEO Makoto Uchida told Reuters in an interview this month that he was "very confident" the two automakers could strengthen their partnership, saying that how they could "elevate competitiveness" was the key area of discussion.