Renault-Nissan Finalize Deal to Gain Control of AvtoVAZ

The Renault-Nissan alliance plans by 2014 to form a new venture with Russian Technologies Corp. that will own 74.5% of OAO AvtoVAZ, Russia's largest carmaker.

Renault already owns 25% of Lada-maker AvtoVAZ. State-owned holding company Russian Technologies owns another 25% stake. The partners plan to buy AvtoVAZ shares held by investment firm Troika Dialog to achieve 74.5% ownership.

Renault-Nissan says it will spend about €569 million on the stock. AvtoVAZ CEO Igor Komarov sales last month that the company intends to borrow as much as 60 billion rubles (€1.5 billion) to bankroll a four-year overhaul of its product line.

The partners have said they aim to boost their combined annual sales in Russia to 1.6 million and boost their market share to 40% of the market by 2016 from Lada's current 22% share. The three companies intend to expand AvtoVAZ's plant in Togliatti to an annual capacity of 1.2 million vehicles by 2017.