(Bloomberg) -- Renault SA and Nissan Motor Co. are moving ahead with a plan to recalibrate their two-decades-old alliance that has weakened over time, with executives agreeing to pursue a range of industrial projects and rebalance capital ties, according to people familiar with the situation.

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During an operating board meeting on Thursday, top executives gave the nod to equalizing Nissan and Renault's cross-shareholdings, as well as common projects that will be part of their reshaped cooperation, the people said. The partners also agreed to hold an event on Feb. 6 in London to present details of their plans, added the people, who asked not to be named.

Under the landmark deal, Renault is expected to reduce its 43% stake in Nissan to 15% through an orderly disposal of stock over time, addressing the lopsidedness that has been a source of friction for years. Tensions spilled over into Japanese-French politics when Renault-Nissan's then-leader Carlos Ghosn openly contemplated merging the two companies before his shock arrest in 2018.

The executives also agreed to continue collaborating on various industrial projects, a condition that was crucial for Renault to obtain approval of the rebalancing from the French government, its most powerful shareholder.

Media representatives for Renault and Nissan declined to comment. The tentative agreements are still subject to approval by the companies' boards in meetings to be held in coming days, the people said.

'Reloaded'

Reworking the alliance will clear the way for Renault Chief Executive Officer Luca de Meo to move forward with a complex split of the company into five separate businesses, including an electric-vehicle and software unit called Ampere. The French carmaker wants to deepen ties with several other partners, including China's Zhejiang Geely Holding Co. and chipmaker Qualcomm Inc., the people said.

"The interest for each of the partners is now to be able to move forward without, for example, Renault's management getting distracted in endless trans-national politics," said Pierre-Yves Quemener, a Stifel analyst with a buy rating on the carmaker.

Renault, Nissan and junior partner Mitsubishi Motors Corp. will embark on roughly five projects initially, codenamed "reloaded," with others to follow, the people said. One involves India, where the companies operate a plant on the outskirts of Chennai making small cars, engines and gearboxes, and another for joint work on commercial vehicles, the people said. Other projects will spur closer collaboration in Latin America, another person said.

Renault has proposed work on 10 common projects, the people added. On top of that, Nissan also plans to invest in Renault's Ampere, they said. Nissan's independent directors endorsed proposals from Renault earlier this month.

Tense Talks

The desire to move forward with specific common activities signals the companies see a future for an alliance that had to be pieced together again Ghosn's ouster. Renault and Nissan can ill-afford to squander potential synergies in the increasingly competitive shift to electric cars. The two have held tense negotiations for months that were complicated by intellectual property concerns.

The alliance has for years sparked joint plants, parts purchasing and development of common underpinnings for a range of vehicles, saving costs and creating one of the biggest automotive groups in the world. But complex organizations, cultural differences and missteps nearly brought down the partnership.

Improving existing collaboration is crucial for both Nissan and Renault to keep up with competition from Tesla Inc., China's BYD Co. and new automotive entrants.

Renault Chairman Jean-Dominique Senard and de Meo participated in Thursday's alliance meeting via video conference. While they initially planned to travel to Japan for the event, progress in the negotiations made the trip no longer necessary, two people said.

Renault shares rose 1.5% on Thursday in Paris trading. The stock is up 21% this month, making it one of the top performances in France's benchmark CAC Index. Nissan shares finished up 1.3%.

--With assistance from Tsuyoshi Inajima.

(Updates with background in the 10th paragraph.)

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