PARIS — Renault SA agrees to sell its 50% stake in Irisbus (see WAI — April '01, p.4) to its partner, Fiat SpA truck-subsidiary Iveco.

The purchase is a coup for Iveco, which is a moderately successful truckmaker, whereas Irisbus is the most profitable of the European bus operations, with a margin of more than 4% and sales of around E1 billion (US$890.2 million) annually. Additionally, Irisbus is gambling on establishing a North American operation, beginning in Las Vegas.

Renault will sell 15% of its holdings on signing the deal and the rest on Dec. 30, 2002, the last day allowed by the European Commission. European regulators are requiring Renault to sell its share in Irisbus as a condition of granting the merger of Renault VI into AB Volvo, which also builds buses.

The companies are offering no financial details, but analysts generally value Irisbus at its annual sales, or around E1 billion (US$890.2 million), making Renault's half worth E500 million (US$445.1 million). Renault will have a member on the board until it sells its last shares, and Elios Pascual will stay on as chairman.

Over the next four years, Irisbus will progressively introduce its own name in the market, replacing the Renault and Iveco brand labels still used in their respective home markets. Renault has agreed not to compete in the bus market for at least seven years.

Iveco and Renault formed Irisbus in 1998 as a Spanish company, with each contributing their bus operations. Irisbus last year sold 9,811 vehicles for 27.1% of the bus market in Europe's five largest markets. It is the leader in Spain, Italy and France, and second in other markets to DaimlerChrysler AG.