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Chinese car giant Shanghai Automotive Industrial Co. (SAIC) was to present detailed plans for a proposed tie-up with U.K. automaker MG Rover Group Ltd. to China’s government within the next few days, U.K. Chancellor of the Exchequer Gordon Brown said.
Brown said SAIC would present a full feasibility study for the joint venture, which reportedly could involve a US$529.10 million investment in Rover.
The U.K. Government hopes the proposed tie-up would help preserve the jobs of Rover’s 6,000 work force. Brown said he hadn’t seen the study and didn’t know whether there would be any job losses at MG Rover.
The deal between SAIC and MG Rover now clearly rests on receiving approval from the Chinese Government.
Brown told reporters that Chinese officials he met with in Beijing were enthusiastic about the planned acquisition.
“I think both the government of China and the British Government welcome the idea of this proposed alliance,” Brown said, but declined to give further details.
“Rover is a private company, and these are commercial negotiations, and it’s not for this government to comment on them at a sensitive time,” he said.
The idea of a tie-up between SAIC and MG Rover first emerged late last year. At the time, MG Rover representatives were confident a deal could be finalized by early 2005, but negotiations stalled.
Some analysts have said this was because MG Rover’s management was too quick to disclose the potential tie-up, annoying their SAIC counterparts.
(Shenzhen Daily February 24, 2005)
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