Renault eyeing $10 billion valuation for EV business, source says

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Renault is targeting a valuation of around 10 billion euros ($10 billion) for the electric vehicle business the French automaker is carving out as a standalone entity, according to a person familiar with the matter.

The company is preparing the EV and software entity for a possible initial public offering on the Euronext Paris stock exchange sometime next year, said the person, who asked not to be identified because the information is private and plans could still change.

The separation of the entity, dubbed Ampere, is part of a revamp that CEO Luca de Meo will present to investors next week. The split of the EV business from Renault’s traditional combustion engine businesses comes as the maker of the Zoe and Clio seeks to navigate a difficult transition to EVs as a possible recession looms in Europe.

Renault will inform investors of its overhaul plans, which are still being finalized, during a capital markets day on November 8.

A spokesperson declined to comment.

Ampère’s split has been at the heart of talks between Renault and Japanese partner Nissan as the two companies seek to reshape a two-decade-old alliance.

Nissan could invest $500-750m for a roughly 15% stake in Ampere, but the deal hinges on a broader deal that would see Renault reduce its own 43% stake in Nissan to around 15% over time. to rebalance the alliance, people familiar with the situation said.

Higher value?

Talks are ongoing, and Ampere’s valuation has been one of the sticking points in talks with Nissan, which has also run into intellectual property issues. Renault is currently worth 9 billion euros and it could be difficult for the automaker to secure a valuation of Ampère above its own market cap.

The IPO would be subject to market conditions, the person familiar with the situation said. Recent turmoil in equity prices has dampened new offerings.

De Meo will also give details next week on Renault’s former combustion engine business, dubbed Horse, which is also being spun off. Renault could announce a deal with China’s Zheijiang Geely Holding for a 50-50 stake in Horse until other investors make new investments, two people familiar with the talks said.

Ampère will be based in France and will employ approximately 10,000 people. The Horse entity with Geely would be based outside France and would also have approximately 10,000 employees.

The French government, which owns 15% of Renault, has been briefed in detail on the plans, one person said.

Separating the two companies should lead to “better capital allocation and ultimately better returns for shareholders,” Stifel analyst Pierre-Yves Quemener wrote in a note this month.

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