Changan Automobile Group Co., a Chinese auto maker under China Ordance Equipment Group Corporation (COEGC), agreed Tuesday to take over auto operations of Aviation Industry Corp of China (AVIC) to form an auto giant.

The COEGC will transfer 23 percent of its stake in Changan to the AVIC for AVIC's stakes in its auto units including Harbin Hafei Automobile Industry Group, Changhe Automobile, Dongan Power, Changhe Suzuki and Dongan Mitsubishi.

However, the total amount of capital for the deal was not immediately available. According to the restructuring plan, the COEGC will take 77 percent of stakes in the new auto firm and the AVIC will hold 23 percent.

It was the first merger deal between state-owned auto companies this year, a move in line with the government's stimulus plan to boost the auto industry.

The government announced a stimulus plan for the country's auto sector earlier this year, which aimed to form 2 to 3 auto giants with capacities reaching 2 million in vehicle production and sales, and 4 to 5 companies with capacities exceeding 1 million in the years from 2009 to 2011 through mergers and acquisitions.