The agreement, dubbed 'alliance stability covenant', caps the government's ability to interfere in the affairs of the Renault-Nissan alliance in return for Nissan's stock in Renault remaining without voting rights.
The French state raised its stake in Renault to 19.7 percent this year, disturbing the fragile balance between the two companies and angering Renault-Nissan boss Carlos Ghosn.
Under the alliance agreement struck in 1999, Renault owns about 43 percent of Nissan. The latter in turn holds about 15 percent of the French automaker's shares, but without voting rights.
Nissan reportedly wanted the French government to cut its Renault stake back to its previous level and had threatened to raise its own stake in Renault to reassert its influence if France did not budge.


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