Renault to hold a board meeting on April 6 to talk on Daimler deal

Article by Christian A., on August 29, 2010

Reuters reported that Renault SA has set a special supervisory board meeting on April 6 to talk about cooperation with German carmaker Daimler AG. According to unnamed sources, the principle of a stake swap below 10% has been established.

Renault has yet to release a comment on this matter though. Sources say that the Renault-Nissan group and Daimler AG are thinking about taking symbolic stakes in each other.

Both companies also intend to work on bigger joint projects amid pressure to reduce costs and produce cars with less emission.

Daimler is reportedly willing to buy a 3% stake in Renault this April. But Daimler won´t be spending any cash and instead, will use its own treasury shares as currency.

On the other hand, it's unknown how Renault, which has junk ratings and is worth less than a third of Daimler, will be able to finance the deal. The Nikkei business daily said that Nissan Motor Co. was eyeing taking a 1%-2% stake in Daimler.

Renault-Nissan CEO Carlos Ghosn has said time and again that he is open to taking in a third partner for the 11-year-old alliance, and that the partners were able to commit and explore projects more due to an equity relationship.

An industry source said that talk of an equity relationship during the April 6 meeting could form the basis of cooperation through joint purchasing and components sharing. However, this source said the option of limiting their partnership to a project-based one was still up for discussion.

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