Mercedes-Benz offloads Nissan stake for US$325 million

[TOKYO] The pension trust of German automaker Mercedes-Benz has sold its entire stake in Japan’s Nissan Motor for US$324.65 million, a source with direct knowledge of the matter said on Tuesday (Aug 26).

Shares of the embattled Japanese automaker ended the day more than 6 per cent lower, following Mercedes-Benz’s announcement on Monday that it would sell its 3.8 per cent 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 key markets, the United States and China. The automaker booked a US$535 million 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 per cent from 15 per cent.

Mercedes-Benz sold its Nissan shares at 341.3 yen (S$2.97) apiece, a 5.98 per cent discount to Nissan’s Monday close of 363 yen, according to the source. The shares were offered at a price range of 337.5 yen to 341 yen, 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 ten investors in the deal were allocated about 70 per cent of the shares sold, the source added.

Nissan declined to comment and Mercedes-Benz said it had no immediate comment beyond its prior statement.

On Monday, a spokesperson for the German automaker had 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 per cent of Nissan, with 17.05 per cent held directly and the rest through a trust. The French automaker booked an US$11 billion writedown on its stake in Nissan last month.

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 fiscal 2027.

Late last month, Espinosa said Nissan was still in the early stages of recovery but that it was making progress on cost cuts.

The automaker has struggled to recover from 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