Mercedes-Benz Divests Complete Nissan Holdings For $324.65 Million

Mercedes-Benz's pension trust has completed the divestment of its entire ownership position in Japanese automotive manufacturer Nissan Motor, generating 47.83 billion yen ($324.65 million) in proceeds, according to a source with direct knowledge of the transaction, news agency Reuters reported on Tuesday.

The Japanese automaker's stock experienced a sharp decline of more than 6 per cent by market close, triggered by Mercedes-Benz's Monday disclosure of plans to liquidate its 3.8 per cent ownership interest. 

This is the most significant single-day stock price drop for Nissan since early July trading sessions.

Investor Confidence Wavers

The substantial share price decline following the divestment news highlights market skepticism regarding Nissan's recovery capabilities. 

The automaker faces mounting challenges from trade tariffs and declining sales performance in key markets including the US and China. Financial results for the quarter ending in June showed a loss of $535 million.

Strategic Partnership Restructuring

The equity transaction follows Nissan's earlier agreement with longtime alliance partner and primary shareholder Renault to modify their strategic partnership framework. The amended arrangement reduces the minimum required shareholding threshold from 15 per cent to 10 per cent, facilitating such ownership adjustments.

Transaction Details

According to the confidential source, Mercedes-Benz executed the share sale at 341.3 yen per share, representing a 5.98 per cent discount from Nissan's Monday closing price of 363 yen. A term sheet reviewed by Reuters indicated the shares were marketed within a price band of 337.5 yen to 341 yen.

Market demand exceeded the available share volume, the anonymous source revealed, with the transaction's top ten institutional investors securing approximately 70 per cent of the divested shares.

Company On Divestment

Both Nissan and Mercedes-Benz declined to provide detailed commentary, with Nissan refusing comment entirely and Mercedes-Benz stating it had no additional remarks beyond previous statements, as per the Reuters report.

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.

Complex Ownership Structure

Renault maintains a 35.7 per cent ownership stake in Nissan through a dual structure: 17.05 per cent held directly with the remainder managed through a trust arrangement. The French automotive group recently recorded an $11 billion writedown on its Nissan investment value.