Renault and Nissan Officially Takeover AvtoVAZ

NissanNissanJapan, 1932 > present159 models
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and RenaultRenaultFrance, 1898 > present189 models
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have signed their agreement with the Russian government to takeover AvtoVAZVAZRussian Federation, 1966 > present8 models
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and create a new joint venture called Alliance Rostec Auto BV. Renault and Nissan paid $742 million to own 67.13% of the new company but share it with Russian Technologies State Corporation who own 32.87%. The rest will be open to investment by private investors. AvtoVAZ was the maker of the Lada brand of cars. 

“Today’s historic agreement is a win-win-win for all companies: Renault, Nissan and AVTOVAZ. It is a significant new chapter in an already solid partnership. The joint venture will help accelerate our Russian market offensive. It will support the competitiveness of AVTOVAZ, Russia’s auto industry leader," Said Renault-Nissan Alliance CEO Carlos Ghosn. 

Renault bought 25% of AvtoVAZ in 2008 ad is paying $366 million to own 50.1% of the new company. Nissan is paying $376 million to own 17.03% of the new company. 

Carlos Ghosn will be chairman of the new company. 

AvtoVAZ's eight-month-old factory in Togliatti will be the major production hub for the new company. It has a 350,000 vehicle annual capacity and will build the new and four other Lada and Renault models. 

After renewing older factories, the Renault-Nissan will have an annual capacity in Russia of 1.7 million cars by 2016. 

This new company does not end the Lada brand, but it certainly begs the question about its future. Renault and Nissan already have their own entry-level brands that would compete directly against Lada.