Renault and Daimler are discussing acquiring mutual equity stakes aimed at adding the German company to the alliance which already includes Nissan Motor and Russian carmaker AvtoVAZ.
The Financial Times reported that, if the talks are successful, the German and French carmakers would take stakes in each other as part of “a longer-term framework for co-operation”, according to sources.
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Discussions have been long-running, and ongoing, but Renault and Daimler have been unable to resolve differences over valuations, Bloomberg News reported, citing people familiar with the matter.
The two carmakers announced last December they were in talks about jointly developing small cars but this has now extended to discussing an exchange of shares, the sources said.
Sandford Bernstein analyst Max Warburton said in a report published on Monday that he believed the firms were discussing: a “much wider and formal level of co-operation across products and technologies”, Reuters reported.
“Sources report Ghosh is trying to persuade Zetsche to join the Renault-Nissan Alliance, via an equity investment or swap, while Zetsche would prefer a simple joint venture,” he said.
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By GlobalData“Speculation could already be heard yesterday [15 March, 2010] and is based on a research note from Sanford Bernstein. We don’t think that everybody would like an equity tie ahead of a partnership,” a Frankfurt-based trader was quoted as saying.
Daimler is looking for a partner to improve profitability of its Mercedes A-Class and Smart cars by sharing development of vehicles and engines.
Neither company commented on the news reports.
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.
