Investigation
Guangzhou Auto and Mitsubishi to Form Joint Venture with Changfeng Motor
In a significant move, Guangzhou Auto and Mitsubishi have signed a Memorandum of Understanding to convert GAC Changfeng into a 50/50 joint venture and delist Changfeng. This merger aims to boost Guangzhou Auto's competitiveness, particularly in the sport utility vehicle sector, although the specific new models or technology to be introduced by the joint venture remain undisclosed.
The partner of Guangzhou Auto that is planning to give up the majority of its stake in the course of the planned merger with Changfeng Motor is Dongfeng Motor. The exact sum involved in this stake transfer has not been detailed in the available search results.
The proposed share exchange deal between GAC Changfeng shareholders and Guangzhou Auto is estimated to be worth approximately 5.23 billion yuan. The share exchange ratio offers a premium of 15 percent over the average trading price per Changfeng Share of the last 20 trading days.
It is important to note that the merger and A-share listing are subject to regulatory and shareholder approval. Guangzhou Auto's Hong Kong-listed H shares closed up 2.2 percent at HK$9.46 ($1.21) on Tuesday. The stock of Changfeng was last traded at 14.07 yuan in October 2010 before being suspended, pending the merger statement.
Unfortunately, the article does not provide any information about the timeline for the merger and A-share listing. Nonetheless, this strategic alliance between Guangzhou Auto, Mitsubishi, and Changfeng Motor is expected to create a strong presence in the automotive industry, particularly in the sport utility vehicle sector.
