Renault and Geely signed an investment agreement with Saudi Aramco
2023.03.02 02:17
Renault and Geely signed an investment agreement with Saudi Aramco
By Ray Johnson
Budrigannews.com – Geely Automobile Holdings Ltd., a Chinese automaker, declared on Thursday that it had reached an initial agreement with Saudi Aramco (TADAWUL:) regarding the oil and gas conglomerate’s potential investment in a planned joint venture with Renault SA (EPA:).
Geely stated that Aramco and Renault had signed a non-binding letter of intent regarding the potential investment. This indicated that Aramco might take a minority stake in a proposed joint venture between the Chinese automaker and Renault.
Aramco is anticipated to acquire a minority stake, while Geely and Renault will maintain equal equity stakes in the venture. The exclusivity period stipulated in the letter of intent is three months, and it will end in September.
In late-2022, Geely had made the announcement of a possible joint venture with Renault to produce and supply combustion and hybrid engines. In light of a shift toward electric vehicles and a growing global awareness of emissions, the venture also intends to develop more efficient gasoline engines.
The companies stated in a statement that the planned company is intended to be a stand-alone supplier with a combined annual capacity of over five million combustion, hybrid, and plug-in engines.
In January, Reuters had reported that the two were also pursuing Aramco as an investor. Thursday, Luca de Meo, CEO of Renault, said that the new company plans to use Aramco’s expertise to help develop “breakthrough” technology for hydrogen and synthetic fuels.
The venture takes place at a time when Renault is going through ongoing restructuring. The European automaker is trying to move largely into electric vehicles, following similar efforts by its rivals.
This is Geely’s second significant alliance with a European automaker. A partnership with Mercedes-Benz had already been announced by the company (ETR:). to create gasoline-hybrid engines and is also an investor in the German automaker.
Geely’s stock dropped 1.5% in tandem with a 0.8% decline in Hong Kong’s
