Aramco close to agreeing 10% stake in Renault, Geely thermal engines JV, sources say

FILE PHOTO: Saudi Aramco logo is pictured at the oil facility in Abqaiq, Saudi Arabia October 12, 2019. REUTERS/Maxim Shemetov/File Photo

PARIS (Reuters) -Saudi Aramco is set to take a 10% stake in a thermal engine joint venture between Renault and China's Geely called Horse Powertrain, said two sources familiar with the matter, beefing up a business supplying legacy automakers as electric-vehicle sales slow.

FILE PHOTO: A Renault logo is pictured in Brussels, Belgium March 4, 2024. REUTERS/Yves Herman/File Photo

The agreement to take a 10% stake in the Horse Powertrain business, first reported by Bloomberg, is lower than the stake of around 20% which was cited by sources at the beginning of discussions.

FILE PHOTO: Geely Auto logo is seen in this illustration taken January 16, 2024. REUTERS/Dado Ruvic/Illustration/File Photo

The transaction would value Horse Powertrain at around 7.4 billion euros ($7.92 billion), said one of the sources.

The sources declined to be identified because discussions were confidential and still ongoing.

Both Horse and Aramco declined to comment, while Geely did not immediately respond to a request for comment after business hours.

The Saudi oil group signed a letter of intent in March 2023 with a view to possibly becoming a minority shareholder in the JV, which was formally established on May 31.

Horse Powertrain supplies gasoline engines, hybrid systems and gear boxes for thermal vehicles.

($1 = 0.9342 euro)

(Reporting by Gilles Guillaume in Paris, additional reporting by Maha el Dahan in DubaiEditing by Dominique Patton and Matthew Lewis)