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March 25, 2010

FRANCE/GERMANY: Daimler and Renault ‘close’ to alliance announcement

Daimler and Renault are close to deciding on a wide-ranging strategic partnership that would include a swap of small equity stakes according to the Financial Times.

Daimler and Renault are close to deciding on a wide-ranging strategic partnership that would include a swap of small equity stakes according to The Financial Times .

An announcement could be made as early as next month with each company holding “symbolic” stakes of around 3% percent, just above the level at which they would have to be disclosed, according to sources close to the situation.

The two companies have confirmed that they are in talks on possible cooperation but declined to comment on whether the accord might include swapping equity stakes.

They have been discussing a partnership to develop small cars, share engines and pursue other joint projects. One source told the FT that Daimler and Renault “don’t want to marry” but are likely to make a small equity swap to underscore their commitment to collaboration.

At the Geneva Motor Show earlier this month, Renault chairman Carlos Ghosn said the alliance could afford to buy a stake in a third partner if the need arose. He added that the alliance was “talking to many people in the industry.”

Renault , which has an 11-year-old cross-shareholding alliance with Nissan, has long spoken of adding a third partner.

Daimler, which has a history of unhappy tie-ups with other carmakers, including Mitsubishi , Hyundai and Chrysler , is said to be less keen on taking an equity stake in Renault , but it does need a partner for small cars where it struggles to be profitable.

UK: Renault Daimler tie-up talks attract mixed reactions

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