| 13-02-2008 News
from Nanjing, Jiangsu province reported that after eight months of negotiations,
the much-anticipated merger between China's largest automaker Shanghai Automotive
Industry Corp (SAIC) and its smaller rival Nanjing Automobile Group is finally
set to happen. The Shanghai-based automaker will sign a final agreement on the
planned merger with Yuejin Motor Group, controlling shareholder of Nanjing Auto,
the biggest M&A deal in China's auto industry in more than two decades. The
two companies will forge the partnership by swapping shares, with Nanjing Auto's
complete vehicle assets to be injected into SAIC Motor Corp, the listed arm of
SAIC, and the Nanjing automaker's auto parts and trade businesses to be incorporated
into SAIC. Nanjing Auto will hold SAIC Motor Corp's stake. But how much share
the Nanjing automaker will obtain from SAIC is still under wraps, with estimates
ranging from 5 to 10 percent. After
the deal, the SAIC-Nanjing Auto complex will become the country's biggest auto
group in terms of assets, number of products and business scope. The two parties,
which rivaled in bidding for Britain's collapsed MG Rover Group two year ago,
reached an initial agreement for the merger earlier this year. After that, SAIC
sent representatives to Nanjing Auto's British plant as part of the due diligence
process. After
the merger, a dual brand strategy will see Roewe, developed by SAIC using part
of the intellectual property rights it acquired from Rover in 2004, positioned
as a mid- to high-end brand. Meanwhile, MG will mainly target the lower segment
of the market - similar to the positioning of Chrysler and Dodge.
Editor:Fredrick
Wei from Chinabuses.com
|
