China's SAIC, Nanjing Auto agree tie-up, sources say

[nadepalma]

This is a follow up from previous articles that I've posted on this continuing story.

Seems that we may see a "greater" SAIC in the near future....with the access to western brands like Austin and MG.

SOURCE: Automotive News

Originally Posted by AutoNews.com

China's SAIC, Nanjing Auto agree tie-up, sources say
Automotive News Europe
December 12, 2007 -- 13:00 CET

SHANGHAI (Reuters) -- Top Chinese car maker SAIC Motor and smaller rival Nanjing Automobile group have agreed in principle on a tie-up under which Nanjing Auto would own no more than 10 percent of SAIC, two sources close to the talks said today.

If it goes ahead, the deal could be a step towards creating a national Chinese car champion that would eventually compete head-on with global giants. The government is seeking to strengthen the industry by encouraging tie-ups and mergers.

Under the deal, Nanjing Auto, owner of the classic MG car brand, would fold its vehicle and auto parts operations into Shanghai-based SAIC in exchange for a stake in SAIC, the sources, who declined to be identified, told Reuters.

They did not provide financial details. A 10 percent stake in SAIC is worth 16.9 billion yuan ($2.3 billion), according to the company's closing share price on Wednesday of 25.76 yuan.

A binding agreement is expected to be signed by the end of this month after senior executives of the two companies met to work out details last week, the sources said.

"Nanjing Auto is likely to get between 5 and 8 percent of SAIC Motor," said one of the sources. "The stake will not exceed 10 percent." The stake would transferred from SAIC's parent group, he added.

A spokeswoman for SAIC, asked for comment, said: "Apart from a July 26 letter of intent to cooperate with Nanjing Auto, no new agreement has been signed so far." She said she did not know when a deal might be announced.

Officials at Nanjing Auto, which is also government-controlled, declined to comment.

SAIC's ventures with General Motors and Volkswagen are China's biggest car sellers, with combined sales of 441,584 cars in the first half of 2007, or 14 percent of the market.

MORE HERE

[GM lover]

How will this effect SAIC venture with General Motors ?

[Butz]

An auto giant in the making. I'd like to see how it'll evolve in the near-future.