Background

On October 26, 2023, CCI approved a joint venture and rebalancing of cross shareholding between Nissan Finance Co. Limited (‘NFC’), Nissan Motor Co. Limited (‘Nissan’) and Renault S.A.S (‘Renault SaS’) (collectively ‘Parties’).^[1]

Parties to Combination

Nissan: is a multinational automobile manufacturer headquartered in Japan. Nissan is active in the automotive sector and mainly designs, develops, manufactures, and sells passenger vehicles and light commercial vehicles (‘LCVs’) under the brands ‘Nissan’ and ‘Infiniti’. In India, Nissan has entered into joint venture agreements with Renault and have formed Renault Nissan Automotive India Private Limited (‘RNAIPL’), Renault Nissan Technology & Business Center India Private Limited (‘RNTBCI’), and Nissan Renault Financial Services India (‘NRFSI’).

Renault: Renault is a French multinational automobile manufacturer headquartered in Boulogne-Billancourt, France. Renault operates in India through its subsidiaries, Renault India Private Limited (‘RIPL’) and its joint ventures (RNAIPL, RNTBCI, NRFSI).

Presently, Renault holds 43.4% of the shares in Nissan, carrying 43.7% of the voting rights. Presently, Nissan holds 15% of the shares in Renault, through NFC, though the voting rights associated with Nissan’s shareholding in Renault are suspended because of the operation of the French Commercial Code.

The proposed combination (‘Proposed Combination’) is structured in the following manner:

i.    Rebalancing of Cross-Shareholdings: (i) Renault will transfer 28.4% of its Nissan shares to a trust administered by a trustee governed by French Law where the voting rights will be neutralized subject to limited exceptions; (ii) Nissan and Renault will have cross-shareholding of 15% of the total issued share capital; and (iii) Nissan and Renault will also have freely exercisable voting rights in each other;

ii.   Joint Venture Transaction: Renault and Nissan will change the shareholding and governance structure of two joint ventures in India namely RNTBCI and RNAIPL.

a. The Parties’ current shareholding stands as (i) RNTBCI: Renault: 66.67%; Nissan: 33.33%; and (ii) RNAIPL: Nissan: 70% (through itself and Nissan Overseas Investments B.V.), Renault: 30%.
b. The Parties’ proposed shareholding will stand as follows: (i) RNTBCI: Renault to reduce its stake to 51%, Nissan to increase its stake to 49%; and (ii) RNAIPL: Nissan to increase its stake to 51%, Renault to reduce to 49%.

Competitive Assessment

CCI left open the exact delineation of the relevant market and approved the Proposed Combination, concluding that it will not cause an AAEC in India for the following reasons:

i.    RNAIPL and RNTBCI operate as captive suppliers and solely provide products and services to NMIPL and RIPL, not directly to the public and hence, the vertical relationship does not raise competition concerns as the joint ventures have no market presence; and

ii.   The activities of RNAIPL and RNTBCI are limited to supplying the parties, not competing with them or other businesses.

[1] Nissan / Renault (Combination Registration No. C-2023/09/1053).