Shanghai Automotive Industry Corp (SAIC), one of China's biggest
sedan makers, will sign the final agreement on a planned merger
with Yuejin Motor Group, controlling shareholder of Nanjing
Automobile (Group) Corp, on December 26 this year, the Beijing
Times reported today.
The two companies are planning a share swap, with Nanjing Auto's
complete vehicle assets to be injected into SAIC's listed
subsidiary - SAIC Motor Corp, and its auto parts and trade
businesses to be injected into SAIC. Nanjing Auto will hold SAIC
Motor Corp's stake, according to the report.
After completion of the merger, the SAIC-Nanjing Auto complex
will be the nation's biggest auto group in terms of assets, number
of products, and business scope.
The two parties signed a letter of intent in July this year for
the much-heralded association, according to an earlier China
Daily report.
They formed a working group to discuss "possibilities and
programs for all-round collaboration" in vehicles, spare parts,
auto trading, and services.
SAIC, the partner of General Motors and Volkswagen, in 2004
bought the intellectual rights to the Rover 75 and 25 sedans, and
K-series engines from MG Rover.
Nanjing Auto, which runs a car venture with Fiat, in 2006
purchased the MG brand, a plant in England, and Powertrain, the
engine arm of the British carmaker.
SAIC, one of the top Fortune 500 multinationals for the past
three years, is the most profitable carmaker in China. But Nanjing
Auto has been in the red for years.
Sales of passenger cars made in China soared 22.83 percent
annually to 5.66 million units in the first 11 months of 2007, the
China Association of Automobile Manufacturers said.
Vehicles sales in China are forecast to total 8.5 million units
this year, up from 7.22 million in 2006.
(Chinadaily.com.cn December 24, 2007)
