Renault has announced the sale of its majority stake in Russian automaker Avtovaz, citing concerns about the company’s continued presence in the country.
The French automaker announced that it would sell its 68 percent stake to a Russian science institute, while its shares in Renault Russia would be transferred to the city of Moscow.
Renault’s Russian assets, according to Moscow, have now become state property.
It is the first major foreign business to be nationalised by Russia since the invasion of Ukraine.
“Agreements were signed on the transfer of Russian assets of the Renault Group to the Russian Federation and the government of Moscow,” Russia’s industry and trade ministry said.
Financial details of the deal were not provided, but in April Russian Industry and Trade Minister Denis Manturov said Renault planned to sell its Russian assets for “one symbolic rouble”.
Renault Group said in a statement on Monday that its board of directors approved agreements to sell Renault Russia to the Moscow city entity, as well as its 67.69 percent stake in Avtovaz to the Russian Central Research and Development Automobile and Engine Institute (Nami).
The transaction also included Renault’s Moscow plant, Avtoframos, which manufactures Renault and Nissan vehicles.
The plant’s production will now resume under the Soviet-era Moskvich brand, according to Moscow Mayor Sergei Sobyanin.
Renault boss Luca de Meo said: “Today, we have taken a difficult but necessary decision; and we are making a responsible choice towards our 45,000 employees in Russia, while preserving the group’s performance and our ability to return to the country in the future, in a different context.”
The agreement, which Renault estimated would cost €2.2 billion ($2.29 billion), includes a six-year option for the group to buy back its stake in Avtovaz.
Avtovaz is Russia’s largest automaker, producing the popular Lada brand.
Renault announced in March that it was closing its Moscow factory.
It came after Ukraine’s President Volodymyr Zelensky called on Renault and other French companies to leave Russia, accusing them of “financing the murders of women and children”.