Daimler to buy 10% of Russia's Kamaz

Daimler AG, the world's largest truck maker, will buy a 10 per cent stake in Russian truck maker OAO Kamaz in a $300 million deal signed on Friday, the head of the German company's truck division and other officials involved said.

The purchase is part of a strategic cooperation agreement that brings together Daimler, Kamaz and two of the truck company's shareholders, state-owned conglomerate Russian Technologies and Moscow-based investment bank Troika Dialog.

"Daimler now has 10 per cent of Kamaz," Daimler truck business head Andreas Renschler said after the signing ceremony in Moscow.

The deal comes as the international auto industry faces plunging demand amid the global economic downturn.

Daimler has been eager to enter the Russian truck market, estimating earlier this year it could grow 20 per cent a year over the next two years.

"We don't know how long this crisis will last, but when the global economy gets back on track, the world will need new trucks," Renschler said.

The 10 per cent stake changing hands under the deal was owned by Troika Dialog. Daimler will pay $250 million this month and $50 million in 2012 if the partnership is successful, Troika Dialog chief Ruben Vardanyan said. Daimler will also receive one seat on the board.

The deal comes just hours after the US Congress turned down a $14 billion bailout for the US auto industry, putting the "Big Three" automakers' future at risk. General Motors and Chrysler are in the most immediate danger while Ford Motor Corporation has said it could face collateral damage if one of its domestic rivals fell.