Exclusive-Renault, Geely expect to finalise engines tie-up this month - sources
By Gilles Guillaume
PARIS (Reuters) -French carmaker Renault (EPA:RENA) and Chinese rival Geely expect to finalise a joint venture for their combustion and hybrid engines towards the end of February, two sources close to the matter told Reuters.
At the same time, Saudi Aramco (TADAWUL:2222) is set to announce the signing of a memorandum of understanding to invest in the venture, one of the sources said, a move that would confirm Aramco's letter of intent from March last year.
The deal is key for Renault which, despite an improved performance, is overshadowed by bigger rivals including Stellantis (NYSE:STLA). It could bolster a legacy business that still accounts for most of Renault's income, while the company also tries to make headway with electric vehicles (EVs).
Renault's unit Horse and Geely could end up with 40% of the joint venture each, with the remaining 20% going to Aramco, the source added. Discussions on the precise investment of the Saudi group are, however, ongoing.
In July, Renault and Geely had said the venture would be split 50-50, with Geely's stake shared between its subsidiaries — 33% for Aurobay and 17% for GHPT.
«The projects advance as planned, we will communicate in due time,» a spokesperson for Renault said, while a spokesperson for Geely declined to give any details on the deal's timing. Aramco said it could not immediately comment.
The venture will aim for 15 billion euros ($16 billion) in annual turnover and employ 19,000 people on 22 sites around the world — mainly in Spain, Romania, Turkey, South America and China.
It is one of the two main pillars of Renault's strategy to stay in the race against larger competitors by signing multiple partnerships to reduce costs and access new markets.
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