Renault quits truck making by selling Volvo stake
French carmaker Renault has turned the page on truck manufacturing by selling its remaining stake in Swedish truckmaker Volvo AB for 1.5 billion euros ($2.0 billion) to cut debt and make strategic investments.autos Updated: Dec 13, 2012 18:49 IST
French carmaker Renault has turned the page on truck manufacturing by selling its remaining stake in Swedish truckmaker Volvo AB for 1.5 billion euros ($2.0 billion) to cut debt and make strategic investments.
The French company, which was the leading shareholder with a 6.5% equity holding and held 17.2% of the Swedish company's voting rights, had earlier sold a 14.9% stake in the Volvo for three billion euros.
Renault had acquired the stake by selling its truck unit to Volvo in 2001. Renault had owned the Saviem and Berliet brands.
The French state, which owns 15.01% of Renault, said late on Wednesday that 45% of the money raised from the latest sale of Volvo shares would be invested in France.
Renault's sales plunged by 18.0% in October. The company's debt has meanwhile dropped steadily from 8.0 billion euros in 2008 to about 818.0 million euros at the end of the first half of 2012.
The news of the sale was well received with Renault shares gaining 1.19% to 40.38 euros on the Paris stock exchange by early afternoon.
The company has said it will also make strategic investments overseas, notably in Russia and China, and focus on top-of-the-range cars and electric vehicles.
Renault-Nissan on Wednesday signed an agreement with state conglomerate Russian Technologies to create a joint venture to allow the auto alliance to gain control of Russia's leading carmaker Avtovaz.
By mid-2014, Renault-Nissan will hold 67.13% of the new joint venture which is to be called Alliance Rostec Auto BV and which will own 74.5% of Avtovaz, the maker of the iconic Russian Lada car.
Back home, Renault wants to step up investment in units producing its top-end models.
Last month, Renault and British manufacturer Caterham announced they would jointly produce a new line of sports cars that would incorporate "the DNA of the Alpine," an iconic Renault model.
Volvo AB is the world's number two truck maker behind Germany's Daimler, employing some 100,000 people at factories in 20 countries.
Last year Volvo AB posted a net profit 2 billion euros on sales of 34 billion euros.