Nanjing Auto to acquire no more than 10% of SAIC stakes

Shanghai. December 18 (Gasgoo.com) – Nanjing Auto will acquire 5 percent to 8 percent or no more than 10 percent of SAIC’s stakes after the merger, according to an insider involved in the merger negotiations, Beijing Morning Post reported today.

 

Nanjing Auto and SAIC will reach a merger agreement in the near future. Under this agreement, SAIC will acquire all assets owned by Nanjing Auto, including OEM and component parts manufacturing facilities. In return, Nanjing Auto will acquire no more than 10 percent of SAIC’s stakes after the merger, according to sources involved in the talks.

 

Earlier in the negotiations, Nanjing Auto aimed 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.