Renault sells stake in Daimler to raise funds
12 March 2021
Renault has sold its entire stake in Daimler, allowing it to reduce debts following a difficult operating year in 2020.
The French carmaker has offloaded its 1.54% stake in Daimler AG for €69.50 per share. Renault owned a total of 16,448,378 shares in the German company, meaning it will receive a total of around €1.143 billion.
The sale will take place through a placement to qualified investors by way of an accelerated book-building process. Settlement of the offering should take place on 16 March 2021 at the latest.
Both companies will continue to work together despite the sale. ′The industrial partnership between the Renault Group and Daimler remains unchanged and is not impacted by this financial transaction,' Renault confirmed.
Proceeds from the sale will help Renault Group ′accelerate the financial deleveraging of its automotive activity.' The carmaker announced net income was down by €8 billion following a challenging year in 2020. It warned that further disruption was expected this year, with the ongoing COVID-19 pandemic and semiconductor shortage impacting sales and production.
This led CEO Luca de Meo to unveil a recovery plan – dubbed Renaulution. The strategy covers all of the Group's brands and will help stabilise the company in the face of mounting challenges. The plan is structured into three parallel phases, focused on cash-generation recovery (Resurrection), renewed and enriched line-ups to help brand profitability (Renovation), and shifting the company's business model to technology, energy and mobility (Revolution).
The Resurrection plan will run up to 2023, with Renovation leading the company up to 2025 and Revolution to be implemented from 2025 onwards.
′The priority is profitability and cash generation, as announced during our strategic plan ′Renaulution'', De Meo said when announcing Renault's financial results for last year. ′2021 is set to be a difficult given the unknowns regarding the health crisis as well as electronic components supply shortages. We will face these challenges collectively, keeping the momentum towards recovery we have been successfully engaged in since last summer.'
Renault is also looking for a buyer to take on its foundry in Caudan, France. As part of its May 2020 savings plan, the carmaker launched a strategic review into the site. It has now concluded that the plant must diversify its activities and continue to reduce production costs.
To meet these challenges, the carmaker presented a voluntary-search project for a buyer with the capability to sustain activities and jobs, while adapting the facilities to changes within the automotive market. As the industry moves towards lighter vehicles, especially to mitigate the weight of electrically-chargeable vehicle (EV) batteries, it sees diversification as the most appropriate solution to keep the plant running.