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SAIC, Nanjing Auto ready to reach a final tie-up
Shanghai. November 26 (Gasgoo.com) - China's biggest automobile industry group Shanghai Automotive Industry Corp (SAIC) and Nanjing Automobile (Group) Corp has completed a review of each other's assets, 21st Century Business Herald reported.
Sources familiar with the negotiations said that the two sides would unveil their assets evacuation reports by mid-December and may sign a final merger agreement before the end of this year.
During Wang Yaoping's visit last week, the two sides have agreed on major issues regarding the merger, such as an asset transferring. But they are still bargaining over shareholding ratio. Nanjing Auto aims to claim some 10% to 15% stake, which SAIC said is "overreaching."
A due diligence report on Nanjing Auto conducted in October by SAIC estimated the company's total assets of Nanjing Auto at US$350 million, which is very small compared with SAIC's US$5.4 billion.
The two parties will jointly develop MG and Roewe brands based on Rover technology following the merger. The two companies currently are sharing the same technology, derived from the now-defunct British carmaker MG Rover.
Nanjing Auto launched production of two MG sports car models earlier this year after acquiring the ownership of British bankrupt car maker MG Rover Group by overbidding SAIC in July 2005. SAIC bought the ownership of two Rover models but not the brand name; instead, the company made a new brand name: Roewe marque.
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