(Yicai) Feb. 18 -- Geely Holding Group and Renault have agree to extend their partnership to Brazil, with the aim of jointly developing and producing zero- and low-emission vehicles in the South American country.

In an agreement signed yesterday, Geely will acquire a minority stake in the French carmaker’s Brazilian subsidiary Renault do Brasil, the Chinese firm's Hong Kong-listed unit Geely Automobile Holdings announced today.

Geely will gain access to Renault’s local production, sales and service networks, Geely Auto said, without disclosing the final terms of the deal, which remains subject to customary closing conditions, nor the size of Hangzhou-based Geely’s stake in the Brazilian company.

In a statement released by Renault, Geely founder and Chairman Eric Li said: “From South Korea to global powertrains, and now to Brazil, Geely’s relationship with Renault has moved forward. By working together, we mutually benefit from shared synergies and improved efficiencies to create greater value for our global users.”

Shares of Geely Auto [HKG: 0175] closed 5.2 percent higher at HKD17.76 (USD2.28) each today, after earlier soaring by as much as 7 percent.

"Geely Auto is not partnering with Geely Holding or providing financing to Geely Holding in relation to the proposed transaction," it noted, adding that the firm is exploring various options to participate in the deal “given the potential synergy from the collaboration with Renault and the significant potential of the Latin American market.”

Geely indirectly owns about 39 percent of Geely Auto and is considered a connected party, with Li having close ties with both businesses. Any future tie-up between Renault and Geely Auto must comply with the Hong Kong bourse's rules on notifiable and connected transactions.

Editor: Martin Kadiev