Renault and Japanese partner Nissan moved to expand in the growing Russian car market on Thursday with a $750 million deal.
The payments will be made in three stages according to a source close to one of the Russian carmaker’s shareholders: December 2012, July 2013 and June 2014.
“The deal appears quite expensive,” said Vladimir Bespalov, auto analyst at Russia’s VTB bank, who also voiced surprise at Renault choosing to buy in via a joint venture.
But, he added, it offers Renault-Nissan a strategic hold in a fast-growing market which promises to soon overtake Germany in volume terms.
Ghosn said “Renault and Nissan are going to pursue transfers of technology towards Russian factories, while our Russian colleagues will be increasingly present in the multi-cultural management of the alliance.”
About $300 million of the pair’s investment will come from Renault, which already owns a 25% stake in AvtoVAZ, with the rest from Nissan. Russian Technologies will restructure AvtoVAZ’s debt by selling of some of the company’s noncore assets, which could yield about seven billion rubles ($238 million).
Investors previously expected the French-Japanese alliance to gain control at the company this or next year. The confirmation of a delay in taking over control at the company sent AvtoVAZ stock spiraling down.