Renault has announced that it plans to sell its entire stake in Daimler. The French automaker said that the sale of its 1.54% stake in the German company will allow it “to accelerate the financial deleveraging of its automotive activity,” essentially generating funds for its turnaround.

According to a report by Bloomberg, Renault duly informed Daimler in advance its intention to offload its holding, and the company has reportedly secured demand for all the stock, which is worth about 1.2 billion euros (RM5.9 billion). Both companies said their decade-long partnership will continue and will not be impacted by the transaction.

The two companies have collaborated on a number of technical fronts. Vehicle developments have included the Smart ForTwo, Renault Twingo as well as the Mercedes-Benz Citan, which is based on the Renault Kangoo, while powertrain cooperation has included the Renault-derived M282 1.3 litre four-cylinder used by Mercedes-Benz as the entry-level mill for its A- and B-Class, CLA, GLA and GLB models.

Earlier this year, the French company unveiled its new ‘Renaulution’ strategic plan, which aims to shift it towards becoming a leading player in electrification and mobility. The first phase of the plan, called Resurrection, will focus on margin and cash generation recovery up to 2023, and it looks like the sale of the Daimler stake is part of that action.