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GM to sell China JV majority control to SAIC

By George Gao  From Gasgoo.comDecember 04, 2009

General Motors has agreed on a deal to sell majority control of its China venture and transfer half of its India unit to Chinese partner SAIC, China's biggest automaker, Reuters reported.

Shanghai, December 4 (Gasgoo.com) General Motors has agreed on a deal to sell majority control of its China venture and transfer half of its India unit to Chinese partner SAIC, China's biggest automaker, Reuters reported, citing sources familiar with the deal.

Under the deal set to be announced soon, GM would sell 1% of its 50-50 China joint venture Shanghai GM to SAIC Motor Corp. That transaction would give SAIC a controlling stake in GM's flagship venture in its fastest-growing market.

However, GM would retain equal voting rights in company decisions. SAIC could pay up to 20% of the joint venture value to take control, while GM would have the option of buying back the stake later at a premium, the sources said.

SAIC suspended its trading on the Shanghai stock market yesterday pending an announcement of a "major asset restructuring". The automaker said it would hold a board meeting before December 9 to discuss the move.

Meanwhile, GM would transfer half of its operations in India to SAIC Motor by setting up a 50-50 joint venture there with the Chinese partner. The deal will require India's regulatory approval.

GM now also holds a 34% stake in SAIC-GM-Wuling, a three-way tie-up for making minivans, and is seeking to lift its stake in the venture, of which SAIC owns 50.1% and Liuzhou Wuling 15.9%.


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