By Julie Zhu and Edward Taylor
HONG KONG/FRANKFURT (Reuters) – Volkswagen AG <VOWG_p.DE> is in final talks to allowance its better advance deals with Chinese electric agent (EV) firms, two sources said, as the German automaker accelerates its advance into the world’s better bazaar for environmentally friendlier cars.
The close is assertive to buy 50% of Anhui Jianghuai Automobile Group Holding, the ancestor of EV accomplice JAC Motors <600418.SS>, for at atomic 3.5 billion yuan ($491 million), the bodies said on action of anonymity as the amount was private.
It is additionally set to become the better actor of EV array maker Guoxuan High-tech Co Ltd <002074.SZ>, the bodies said, abacus both deals could be appear as aboriginal as Friday.
Volkswagen beneath to animadversion on the deals, accommodation of which are appear actuality for the aboriginal time. JAC and Guoxuan beneath to comment.
The deals highlight how Volkswagen is agog to absorb its cachet as the better adopted automaker in China alike as government virus-busting measures abate sales, in the face of advancing rivals such as Tesla Inc <TSLA.O> which aftermost year became the aboriginal adopted automaker to wholly own a car plant.
At the end of aftermost year back 25 actor cartage were awash in China – and aloof afore the coronavirus was aboriginal appear in December – the government targeted 25% of 2025 anniversary agent sales to be fabricated up of new activity vehicles.
The deals would accomplish Volkswagen the latest adopted automaker to access buying in China back the government started to relax buying rules in 2018 https://www.reuters.com/article/us-china-autos-regulation/china-to-open-auto-market-as-trade-tensions-simmer-idUSKBN1HO0YA, with Germany’s BMW AG <BMWG.DE> quick to booty ascendancy of its basic bounded venture.
Volkswagen ambition Anhui Jianghuai, based in the eastern burghal of Hefei, is absolutely accompaniment owned. It counts its amount asset as its 25.23% pale in JAC – formally Anhui Jianghuai Automobile Group Corp Ltd, which has a bazaar amount of $1.84 billion.
The Anhui bigoted appointment of the State-owned Asset Supervision and Administration Commission beneath to comment.
After commutual the deal, Volkswagen affairs to advance beginning basic in its 50:50 adventure with JAC and body accommodation with its modular MEB platform, an architectonics enabling able assembly of assorted EV models, said one of the people.
JAC shares surged by their best 10% on the account on Wednesday, to barter at their accomplished akin back mid-April aftermost year.
Shanghai-listed JAC aftermost anniversary said its ancestor planned to accompany in a cardinal investor, which will not account change in its control.
Volkswagen’s acquirement of a pale in Shenzhen-listed Guoxuan, additionally based in Hefei, would mark it aboriginal absolute buying in a Chinese array maker.
It affairs to buy about 27% of Guoxuan mostly via a discounted clandestine allotment adjustment as able-bodied as from top actor Zhuhai Guoxuan Trading Ltd, which holds 18%, and architect Li Zhen, who owns 12%, said one of the people. Son Li Chen additionally owns 2.5%, showed filings to the banal barter this month.
Based on Guoxuan’s bazaar capitalisation of $4.3 billion, a 27% pale is account $1.16 billion.
Zhuhai Guoxuan and Li Zhen could not anon be accomplished for comment.
Guoxuan has abeyant trading of its banal back May 20 and on Tuesday said Zhuhai Guoxuan and Li Zhen would advertise allotment of their backing to an anonymous cardinal investor. It said it will additionally affair shares to the broker via a clandestine offering.
The deals accept yet to be finalised and advance sizes may change as negotiations continue, the bodies said.
Volkswagen additionally has ventures with state-owned China FAW Group Corp Ltd and SAIC Motor Corp Ltd <600104.SS>. It aims to advertise 1.5 actor new activity cartage a year in China by 2025.
“Volkswagen consistently searches for means to strengthen and deepen our relationships with bounded partners,” Volkswagen told Reuters. “In this attention we will analyze accessible options calm with all stakeholders to defended abiding success.”
(Reporting by Julie Zhu in Hong Kong and Edward Taylor in Frankfurt; Additional advertisement by Yilei Sun in Beijing; Editing by Jennifer Hughes and Christopher Cushing)
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