FAW Group said to take 5% stake in Changan Mazda
Shanghai (Gasgoo)- FAW Group will acquire 5% stake in Changan Mazda, currently a 50/50 joint venture between Chongqing Changan Automobile Co., Ltd. and Mazda Motor Corporation, according to a local media outlet. Meanwhile, the equity proportion of two existing shareholders will be each diluted to 47.5%.
Mazda3 Axela; photo credit: Changan Mazda
It was rumored in early July that FAW Mazda and Changan Mazda would soon announce merger of their businesses and combine sales channels in September. The share acquisition by FAW Group may be the final solution to the merger of Mazda's two Chinese joint ventures, said a person with direct knowledge.
In June 2021, China Beijing Equity Exchange (CBEX) published a capital increase project of Changan Mazda. The joint venture was trying to raise money by soliciting an eligible investor, who would hold no more than 5% of equity interests in Changan Mazda. The funds raised would be used to help the company improve its management quality, perfect its industrial deployment, and enhance its competitiveness. After completing the capital increase, the joint venture's registered capital would be increased by $5.84 million.
Another local media channel reported in April that FAW Group, Mazda and Changan Automobile were in talks with the attempt to make the business of FAW Mazda merge with that of Changan Mazda.
Aside from the combination on the level of dealership, the production of vehicle models like the Atenza would be taken over by Changan Mazda as well, said the media channel, citing sources briefed on the matter.
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