TOKYO, Oct 11 (Reuters) – Nissan Motor Co Ltd ( 7201.T ) will hand over its business in Russia to a state entity for 1 euro ($0.97), it said on Tuesday, taking a loss of about $687 million in the latest costly exit from the country by a global company.
The Japanese automaker is transferring its stake in Nissan Manufacturing Russia LLC to state-owned NAMI, he said. The deal will give Nissan the right to buy the business within six years, Russia’s industry and trade ministry said.
The deal makes Nissan the latest major company to leave Russia since Moscow sent tens of thousands of troops to Ukraine in February. It also reflects a move by Nissan’s top shareholder, French automaker Renault ( RENA.PA ), which sold a majority stake in Russian carmaker Avtovaz ( AVAZI_p.MM ) to a Russian investor in May.
Sign up now for FREE unlimited access to Reuters.com
The sale to NAMI will include Nissan’s production and research facilities in St. Petersburg, as well as its sales and marketing center in Moscow, the ministry said.
Nissan said it expected an extraordinary loss of about 100 billion yen ($687 million) but maintained its profit forecast for the financial year ending in March.
Renault, which owns 43% of Nissan, estimated that its Japanese partner’s decision would lead to a €331 million hit to its net income for the second half of 2022.
Nissan had suspended production at its St. Petersburg plant in March due to supply chain disruptions. Since then, the company and its local unit had been monitoring the situation, she said. But there was “no visibility” of a change in the external environment, Nissan said, prompting it to decide to leave.
New alliance partner Mitsubishi Motors Corp ( 7211.T ) is also considering an exit from Russia, the Nikkei newspaper said. A Mitsubishi spokesman said nothing had been decided.
The departure comes as Nissan embarks on a major overhaul of its relationship with Renault. The two said on Monday they were in talks about the future of their alliance, including Nissan considering investing in a new electric vehicle venture from Renault.
Those talks, which could prompt the biggest reset at the alliance since the arrest of longtime executive Carlos Ghosn in 2018, also included the possibility of Renault selling some of its controlling stake in Nissan, the company said. Reuters two people with knowledge of the talks. .
Renault reportedly sold its stake in Avtovaz for one ruble ($0.02).
The Nissan deal was “of great importance to the industry,” Russian Industry and Trade Minister Denis Manturov said in a statement.
($1 = 145.6200 yen)
($1 = 63.8500 rubles)
Sign up now for FREE unlimited access to Reuters.com
Reporting by Gleb Stolyarov, Caleb Davis and Satoshi Sugiyama; Writing by Alexander Marrow and David Dolan; Editing by Louise Heavens and Mark Potter
Our Standards: The Thomson Reuters Trust Principles.
