TOKYO — The pension trust of German automaker Mercedes-Benz has sold its entire stake in Japan's Nissan Motor for ¥47.83bn ($324.65m), a source with direct knowledge of the matter said on Tuesday.
Shares in the Japanese automaker ended the day more than 6% lower after Mercedes-Benz’s announcement on Monday that it would sell its 3.8% stake. The decline marked the stock’s biggest one-day drop since early July.
The slide in Nissan shares since the news highlights investor scepticism over the company’s turnaround prospects as it battles tariffs and falling sales in its main markets, the US and China. The automaker booked a $535m loss for the three months ended June.
The share sale comes after Nissan agreed earlier this year with its long-time partner and top shareholder Renault to amend their partnership that would allow lowering the required shareholding to 10% from 15%.
Top 10 investors
Mercedes-Benz sold its Nissan shares at ¥341.3 apiece, a 5.98% discount to Nissan’s Monday close of ¥363, according to the source. The shares were offered at a price range of ¥337.5-¥341, a term sheet seen by Reuters showed.
Demand outstripped the number of shares placed for sale, the source said on condition of anonymity as the information was confidential. The top 10 investors in the deal were allocated about 70% of the shares sold, the source added.
Nissan declined to comment and Mercedes-Benz said it had no immediate comment beyond its previous statement.
On Monday, a spokesperson for the German automaker said the Nissan stake, which was transferred to its pension assets in 2016, was not of strategic importance and described the sale as cleaning out its portfolio.
Renault owns 35.7% of Nissan, with 17.05% held directly and the rest through a trust. The French automaker booked an $11bn writedown on its stake in Nissan last month.
Renault will probably continue to want to unwind its stake in Nissan, but is bound by contract restrictions on the selling of its shares in the open market, said Christopher Richter, auto analyst at CLSA.
Turnaround plan
“Before Nissan’s financials got tattered, Nissan was wanting to buy those shares,” he said. “But now that cash is kind of tight with Nissan there’s a lot less appetite to buy back shares from Renault.”
Nissan CEO Ivan Espinosa, who took over in April, has unveiled a turnaround plan to restore profitability, which includes measures such as cutting global production capacity to 2.5-million vehicles from 3.5-million and manufacturing sites to 10 from 17 by financial 2027.
Late last month, Espinosa said Nissan was still in the early stages of recovery but that it was making progress on cost cuts.
Seiji Sugiura, senior analyst at Tokai Tokyo Intelligence Laboratory, said he expects Renault to gradually unwind its stake in Nissan as their partnership weakens.
Nissan has faced difficulties since the ousting of former boss Carlos Ghosn, architect of the Renault-Nissan alliance, who was charged by Tokyo prosecutors with financial misconduct — allegations he denies.
Reuters
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