Shanghai, February 24 (Gasgoo.com) China's biggest automaker SAIC Motor Corp has won regulatory approval to acquire an additional 1% stake in Shanghai GM to control more than half of its currently 50:50 car venture with General Motors, Shanghai Daily reported today.
SAIC would pay about $85 million for the added 1% share boost its total stake in Shanghai GM to 51%, enabling it to consolidate the venture's accounts onto its balance sheet, the company said in its filing to the Shanghai Stock Exchange yesterday.
This major asset restructuring, which was announced two months ago, is part of SAIC's further cooperation with financially troubled General Motors in global operations, after the Chinese auto giant recently became a major shareholder of GM's India unit.
GM and SAIC also plans to set up a $650 million joint venture in Hong Kong, which will take over GM India. The new JV will soon start to produce and sell Shanghai GM and SAIC-GM-Wuling's small cars and minivans in India.
Shanghai GM, as GM's flagship car venture in China, saw its sales more than double from a year earlier to 90,202 cars in January after selling 727,620 cars (up 63.3%) in the domestic market last year.