Saudi Aramco has agreed to take a minority stake in Renault Group and Geely’s planned combustion-engine venture as the oil behemoth seeks to expand into transport technologies.
Reuters reported in January that Aramco was in advanced discussions to take a stake of up to 20 percent in the joint venture, which would develop and supply internal combustion engines and hybrid technologies. Renault has referred to the company as "Horse," but that name was absent from a news release announcing the agreement on Thursday morning.
Geely and Renault are expected to retain equal equity stakes in the new independent entity, according to the release, which did not disclose how much each would own and how much Aramco would invest.
The joint venture is aimed at developing more-efficient gasoline engines and hybrid systems at a time when the focus of much of the automobile industry has been on the capital-intensive transition to purely electric vehicles.
Renault also plans to spin off its full-electric vehicle activities in a listed entity to be called Ampere as part of a broad restructuring that includes an overhaul of its alliance with Nissan.
"This partnership with Aramco will give our new powertrain company it a head start in the race towards ultra-low-emissions ICE powertrain technology," Renault CEO Luca de Meo said in the statement.