SAIC, Nanjing due diligence process nears completion

Shanghai. November 12 (Gasgoo.com) - The due diligence process that could signal a merger of Shanghai Automotive Industry Group (SAIC) and Nanjing Automobile Group is nearing completion, Chinese media reported.

An unnamed spokesperson for SAIC said that the two sides are "in the final stages of their audits and asset evaluations", but "still need to work on some technical details". The spokesperson also said that there is no timetable for the merger, however other source said that the deal could be completed by the end of the year, as previously scheduled.

Among the options being considered are the rolling of Nanjing's production assets into those of SAIC, while a similar process would also take place for the pair's component supply assets. In return, Nanjing's parent company would take a stake in Shanghai Automotive or its listed unit, Shanghai Motor.

Shanghai Automotive Industry Group (SAIC) owns a total asset of 130 billion yuan ($17.54 bln), while the number for Nanjing Automotive Group is 12 billion yuan ($1.62 bln), official financial document revealed.

Talks have been taking place over a deal between the two Chinese automakers since the middle of the year, and the initial deadline for the completion of due diligence (1 October) was missed due to the sheer complexity of the two companies' assets. However, a report late last month suggested that the pair had talked about the possibility of SAIC's Volkswagen (VW) joint venture (JV) using the under-utilised plant of Nanjing's JV with Fiat.