Is FAW sensing an opportunity to add scale and value and would Beijing approve?
It has been reported that China s First Automotive Works (FAW) is in talks to acquire Brilliance China Automotive Holdings (Brilliance) for $7.2bn. The deal is raised as a prospect with Brilliance s major shareholder, Huachen Automotive Group, on the brink of bankruptcy.
Brilliance itself, outside of its joint ventures with BMW, has struggled of late. Group production has declined from a high of 568,0000 in 2013 to 234,000 in 2020. The 2020 production level was a fall of 9.7%, comparing unfavourably with a total industry decline of 3.8%. Recent performance, combined with a set-up capable of producing some 650,000 light vehicles a year, is unsustainable. Brilliance s current travails are far removed from its position a decade ago when it seemed set to emerge from the pack and become one of China s leading domestic OEMs. A succession of models have failed to capture the imagination, while its attempt to m
China’s Brilliance makes decent looking cars compared to its local rivals, and a lot of the good work comes from the famous Italian design house Pininfarina. The former loves Pininfarina’s designs so much that they’ve […]
4 February 2021 1:14 pm / 0 comments
Chinese automaker FAW Group is reportedly looking at purchasing Brilliance China Automotive Holdings for about US$7.2 billion (RM29.2 billion),
Reuters reports. The potential acquisition of BMW’s main partner in China by FAW comes at a time when Brilliance’s top shareholder, Huachen Automotive Group, is on the brink of bankruptcy, having defaulted on 6.5 billion yuan (RM4.08 billion) in debt obligations late last year.
Sources told the news agency that the purchase would be a two-stage deal, in which FAW would first purchase 30.43% of Brilliance owned by Huachen as well as the 11.89% stake held by the state-controlled Liaoning Provincial Transportation Investment Group, before making a mandatory bid for the rest of Brilliance’s shares.
China s FAW considers acquiring BMW partner Brilliance for about $7B, report says
Reuters
BMW wants take control of its joint venture in China with Brilliance.
FAW Group is looking at acquiring Brilliance China Automotive Holdings for about $7.2 billion in a two-stage deal that would see BMW s main Chinese partner taken private, two people with direct knowledge of the matter told Reuters.
The potential acquisition by state-owned FAW, China s No. 2 automaker, comes at a time when Brilliance s top shareholder Huachen Automotive Group is on the brink of bankruptcy, having defaulted on 6.5 billion yuan ($1 billion) in debt obligations late last year.
Under plans being discussed, FAW would first purchase 30.43 percent of Brilliance owned by Huachen and 11.89 percent held by the state-controlled Liaoning Provincial Transportation Investment Group, said the sources.
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