Liaoning SG Automotive Group (SG), China's largest bus manufacturer, signed an agreement with CSR Zhuzhou Institute Co. Thursday to jointly develop new energy vehicles.

The move was the latest instance of a "combination of giants" and is part of China's efforts to boost the development of new energy vehicles, particularly electric cars, analysts said.

Under the agreement, Dandong Huanghai Automobile Co., a SG subsidiary, will pay 137 million yuan (20.76 million U.S. dollars) for a 35.71-percent stake in CSR Zhuzhou's branch, Hunan CSR Times Electric Vehicle Co., SG said in a statement filed with the Shanghai Stock Exchange.

Moreover, CSR Zhuzhou will pay 127 million yuan for a 34-percent stake in a Dandong Huanghai subsidiary, Changzhou Huanghai Automobile, according to the statement.

Meanwhile, Dandong Huanghai will invest 12 million yuan to establish a joint venture with CSR Zhuzhou. Dandong Huanghai will hold a 60-percent stake in the joint venture.