French carmaker Renault will sign a deal to buy a stake in Russia's biggest auto producer Avtovaz on Friday, state industrial giant Rosoboronexport said in a statement.
The two carmakers were also to sign an agreement on “strategic partnership.”
The deal calls for Renault to buy a 25 percent plus-one-share blocking stake for between 1.1 billion and 1.2 billion dollars (734 million and 800 million euros), the Kommersant daily said on Wednesday.
The two sides signed a memorandum of understanding in December. Rosoboronexport owns a majority stake in Avtovaz.
Renault and Avtovaz originally planned to sign the agreement on Tuesday but this was delayed as Renault was carrying out due diligence work on Avtovaz, a spokeswoman for the French carmaker told AFP earlier.
Avtovaz CEO Boris Alyoshin meanwhile told the Nezavisimaya Gazeta daily in an interview published on Wednesday that Avtovaz would “significantly” boost production after the deal with Renault.
“We will definitely produce at least one car model together…. What's important from the strategic point of view is that our deal with Renault will give us access to a platform. It's the best way of lowering costs,” he said.
Platform is a technical term for the frame of a car, which can be used with a variety of models from the same family. Platforms are increasingly used in the car industry because they reduce development and production costs.
Avtovaz is based in Tolyatti, some 800 kilometres (497 miles) southeast of Moscow and is majority owned by the state. It remains the single largest carmaker in Russia but is rapidly losing market share to foreign producers.
