French automotive giant Renault signed a billion- dollar deal Friday to buy a 25 per cent blocking stake in Russia's largest automaker AvtoVAZ in the rush to cash in on the country's booming car market, according to dpa. Renault's CEO Carlos Ghosn, at the signing ceremony in Moscow, declared that with the deal Russia would become Renault's main market in terms of sales, Interfax news agency reported. Facing flat markets at home, Renault beat out four heavyweight foreign contenders bargaining hard with AvtoVAZ for the chance to buy into what was the world's fastest growing car market last year. AvtoVAZ's main shareholders - state arms manufacturer Rosoboronexport and Troika Capital Partners investment fund - are to transfer a 25 per-cent-plus-one-share blocking stake to Renault by mid-2008 for an initial payment of 1 billion dollars. The deal calls for Renault aims to expand annual output at AvtoVAZ's factory in southern Russia to 1.5 million from 700,000 units by 2014, the companies said in a statement. It confirmed Renault's presence in Russia, where it has been producing its Logan model at a plant it invested 250 million dollars in since 2005. In a joint statement Friday, the companies said they had "finally consolidated a qualitatively new level of cooperation between Russia and Europe in the automotive industry." Renault's Ghosn said that AvtoVAZ's trademark Lada brand would be preserved amid concerns that the name attached to Soviet AvtoVAZ's first small-car model produced 40 years would be scrapped. "Lada is a Russian brand, part of Russia's culture, and will remain so," Ghosn told reporters after the signing. Russian national champion AvtoVAZ had previously said foreign cooperation would be limited to parts and equipment, but losing out to foreign competitors and with failing hopes of a state-funded bail- out last year the company began looking for outside partners. Italian carmaker Fiat, whose car designs inspired the Lada, Canadian car parts maker Magna and US firm General Motors competed for the AvtoVAZ shares, Russian media reported in December. AvtoVAZ also announced planned initial public offerings in Moscow and London in late September, Sergei Chemezov, the head of Roboronexport said Friday.
