GM to sell majority control of its China venture to SAIC
By Andrew C., 27 Aug, 2010. 0 Comments
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General Motors Co. is expected to enter a deal for Chinese partner SAIC to acquire majority control of its China venture and get as much as half of its India operations, according to sources who claim to be familiar with the negotiations. As a result of the deals, GM will receive an infusion of cash that it requires to restructure itself in two of the world's fastest-growing markets.
It's anticipated that the deal would have GM selling 1% of its 50-50 China joint venture to SAIC Motor Corp., China's biggest automaker, according to a Reuters report that cited two sources who remain unnamed. This means that SAIC would have a controlling stake. SAIC could pay up to 20% of the joint venture value to take control however, GM has the option of buying back the stake later with a premium. According to a New York Times report, GM's international operations have been looking to raise cash in the past month to cover losses incurred when its South Korean subsidiary, Daewoo, made a costly bad bet on financial derivatives based on the Korean won. SAIC and GM are 50-50 partners in Shanghai GM, which makes Cadillac, Buick and Chevrolet models. GM also owns one-third of a venture with SAIC and Liuzhou Wuling Automobile, the maker of popular mini vans and mini trucks. [via autonews]
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