China's Geely buying 34 percent of Renault Korea Motors

The logo of Renault Korea Motors [RENAULT KOREA MOTORS]

Geely Automobile Holdings is acquiring 34.02 percent of Renault Korea Motors, becoming the second-largest shareholder of the automaker.

The shares purchased are newly issued, Renault Korea Motors said.

Renault Group BV, a Dutch subsidiary of Renault Group, remains the largest shareholder. Previously, Renault Group BV held 80.04 percent of the company, while Samsung Card held 19.9 percent. The remaining 0.06 percent was owned by the automaker's employee stock ownership association.

The new ownership ratio will be approximately 52.81 percent for Renault, 13.13 percent for Samsung Card and 0.39 percent for the employee stock ownership association.

Renault Korea Motors would not confirm the ratio. It was also unable to clarify when the deal will be completed.

After the investment, Geely Automobile Holdings will become the second-largest shareholder.

Geely Automobile Holdings is a subsidiary of Hangzhou, China's Zhejiang Geely Holding Group, which owns Gothenburg, Sweden's Volvo Cars. In 2018, Geely Holding acquired 9.7 percent of Germany's Daimler AG for $9 billion. Daimler AG owns Mercedes-Benz.

In 1994, Samsung established Samsung Motors, which was acquired by France's Renault in 2000 following the 1997-98 Asian financial crisis. Renault agreed to include "Samsung" in the company name and paid 0.8 percent of annual sales to Samsung for use of the name. That contract ended in August 2020.

In March, Renault Korea Motors changed its name from Renault Samsung Motors.

The replacement of the word "Samsung" with "Korea" is supposed to suggest a greater focus on the Korean market.

Renault Korea Motors in January said it will work with Renault Group and Geely Holding Group to develop a new hybrid vehicle just for the Korean market by 2024.

"The acquisition by Geely means active cooperation with Renault Korea Motors to develop models together and create synergy based on the high potential of the Korean market," Renault Korea Motors CEO Stéphane Deblaise said in Tuesday's statement.

BY SARAH CHEA [chea.sarah@joongang.co.kr]