And the deal is done – SAIC takes over Nanjing
Today marks a very special day in Chiinese automotive history. Bosses of both SAIC and NAC met at the Beijing Diao Yu Tai state hotel to sign an agreement that will see Nanjing Automotive Corporation become part of Shanghai Automotive Industry Corporation.
SAIC will reward NAC with no more than 8% of shares in SAIC, in return NAC will hand over all of its assets. The deal is supposed to worth in the region of 14 billion RMB (1.9 Billion USD)
The deal will be formally wound up before the end of 2008, as the deal needs the Chinese governments regulatory approval. When the deal is completed, SAIC and NAC combined will be the biggest Chinese automotive company in China.
China is slowly opening its automotive market (as is expected of it by the WTO), the 2nd largest in the world, to foreign competitors, China realizes that it needs a large domestic company to take on the likes of GM in the domestic market, and eventually abroad.
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This could be a major boost to Chinese automobile market. I am not sure if NAC is going to benefit from this in the long run.
Here is a link for further description of main events. http://www.youngentrepreneursociety.com/