BRIEF: Geely acquires stake in Renault Brazil, gains local resources

Geely Automobile Holdings Ltd. (0175.HK) and its parent, Geely Holding Group, have agreed to acquire 26.4% of the Brazilian unit of French carmaker Renault SA(RNO.PA), which will share its production capacity and sales network with its new Chinese partner.

Renault Brazil is valued at approximately 13.6 billion yuan ($1.91 billion), with Geely Auto and Geely Holding investing mainly in the form of technology assets, valued at 3.34 billion yuan for the former and 944 million yuan for the latter. Geely Auto will contribute an additional 585 million yuan in cash, according to Caixin.

Geely Holding is Geely Auto’s controlling shareholder. Based on previous disclosures, Geely Auto and Geely Holding will hold 21.29% and 5.11% of Renault Brazil, respectively.

Renault said Renault Brazil has become the distributor of Geely’s new energy vehicles (NEVs) and related products in Brazil, including Geely’s EX5 electric model. Renault will also adopt one of Geely’s NEV platforms to launch its own new energy models, which will be jointly produced with Geely at Renault Brazil’s Ayrton Senna plant.

Geely Auto’s stock open lower on Wednesday, closing at HK$17.42 by the midday break, down 0.8%.

By Lee Shih Ta

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