The Detroit News - Shares in Russia's largest automaker OAO AvtoVAZ rallied for a third day Thursday after a Japanese newspaper reported that Nissan Motor Co. and its French alliance partner Renault SA were in talks to take a controlling stake in the maker of Lada cars.
AvtoVAZ briefly surged as much as 8.4 percent on the report in the Nikkei newspaper that Nissan may pay as much as $1 billion for a 25 percent stake in the Russian company.
Renault already owns 25 percent plus one share, which it bought in 2008 for $1 billion, and the Russian government has invited the Renault-Nissan Alliance to acquire a controlling stake.
Nissan declined to comment.
According to the Nikkei, which didn't identify its sources, the Japanese automaker has reached agreements in principle with major AvtoVAZ shareholders Russian Technologies Corp., or Rostekhnologii, investment bank Troika Dialog and others to acquire shares equaling roughly 25 percent.
The newspaper said such a deal would make Renault-Nissan the world's third-biggest auto-making group after Toyota Motor Corp. and General Motors Co., with combined sales of 7.23 million vehicles, based on 2010 figures.
Nissan and Renault already have announced plans to invest up to $2 billion in Russia by 2015, viewing the country as a strategic market.
Most forecasters expect Russia to surpass Germany to become Europe's largest market during this decade.
AvtoVaz sold 570,000 vehicles last year, capturing 30 percent of the Russian market totaling 1.91 million units, according to the Association of European Businesses.
After taking control of AvtoVaz, Nissan and Renault plan to expand the Russian partner's plant in central Russia and begin making a Nissan-brand subcompact as early as 2012, the Nikkei said.
An ultralow-cost vehicle for emerging markets, which Nissan is developing based on an old model, also is expected to be manufactured at an AvtoVaz factory, and would be sold by the three companies under their respective brands.
The Nissan-Renault team is considering building a plant in Russia's Far East, too, the newspaper said.
