Renault-Nissan signs deal to take control of Russian carmaker
THE Renault-Nissan alliance yesterday signed a long-awaited deal to take control of Russia’s largest car maker, AvtoVAZ, as it seeks growth in fast-growing markets outside sluggish Western Europe.
The car group would hold 67 per cent of a joint venture with state corporation Russian Technologies to own 74.5 per cent of AvtoVAZ. The non-binding preliminary agreement would give the Franco-Japanese alliance 50.01 per cent of the maker of the Lada.
The alliance plans to invest about $750m in the deal, including about $300m from Renault and the remainder from Nissan.
“Today’s memorandum is the latest step in an expanding collaboration that helps modernize the leader of Russia’s auto industry,” said Renault-Nissan Alliance chairman and CEO Carlos Ghosn in a statement.
Russian Technologies has agreed to restructure its outstanding loans with AvtoVAZ to give it a “strong balance sheet with no liquidity constraints”, while the alliance would accelerate technology transfer to AvtoVAZ.
The companies hope to sign a definitive deal by the end of this year, with the transaction expected to be completed by 2014, by which time the venture will buy Russian investment company Troika Dialogs entire stake in AvtoVAZ.