According to a person familiar with the matter, Renault is targeting a valuation of around 10 billion euros ($10 billion) for the electric vehicle business, which the French automaker is spinning off as a separate entity.
The company is preparing the electric vehicle and software company for a possible IPO on Paris’ Euronext stock exchange sometime next year, said the person, who asked not to be identified because the information was private and plans could change.
The spin-off of the company, dubbed Ampere, is part of a makeover that CEO Luca de Meo will unveil to investors next week. The separation of the EV business from Renault’s traditional combustion engine business comes as the maker of Zoe and Clio tries to navigate a difficult transition to electric vehicles as a potential recession looms in Europe.
Renault will update investors on its remodeling plans, which are still in the process of completion, during a capital markets day on November 8.
A spokesman declined to comment.
The Ampere spin-off has been at the center of talks between Renault and Japanese partner Nissan as the two companies seek to reshape a two-decade-old alliance.
Nissan could invest $500 million to $750 million for a roughly 15 percent stake in Ampere, but the agreement is conditional on a broader deal that sees Renault grow its own 43 percent stake in Nissan to around 15 percent over time would have said to bring the Alliance back into balance with the situation.
Talks are still ongoing, and Ampere’s valuation was one of the sticking points in Nissan discussions, which also stalled over intellectual property concerns. Renault is currently worth €9 billion and it could be difficult for the automaker to get a valuation on Ampere higher than its own market cap.
The IPO will be subject to market conditions, said the person familiar with the situation. The recent turbulence in share prices has put a damper on new offerings.
De Meo is also set to announce next week details of Renault’s old internal combustion engine business, called Horse, which is also being spun off. Renault could announce a deal with China’s Zheijiang Geely Holding for a 50-50 stake from Horse until other investors make further investments, two people familiar with the talks said.
Ampere will be based in France and employ around 10,000 people. The Horse unit with Geely would be based outside of France and also have about 10,000 employees.
The French government, which owns 15 percent of Renault, has been fully briefed on the plans, one person said.
The separation of the two companies will likely result in “better capital allocation and ultimately improved shareholder returns,” Stifel analyst Pierre-Yves Quemener wrote in a note this month.