Dongfeng Motor Corp, a State-controlled vehicle manufacturer in Shiyan, Hubei province, is planning a share purchase of more than 40 percent in Fujian Motor Industry Group, China Business News reported. The two companies will sign an agreement on the deal on Thursday, but it is unclear how much the deal is worth, the report added.
The acquisition will help carry out the government’s instruction of consolidating the fragmented automobile industry, the report added.
Fujian Motor was founded in 1992, and is fully controlled by the government of Fujian province. The company has five automobile manufacturing subsidiaries, including Taiwan’s Yulou Motor Co, Fujian Benz Automotive Co, and South East (Fujian) Motor Co.
The acquisition does not involve the five subsidiaries of Fujian Motor, according to the report.
Dongfeng Motor is the parent of Hong Kong-listed Dongfeng Motor Group Co. Dongfeng Motor sold 3.08 million cars in 2012, according to data from the China Association of Automobile.
Via: ChinaDaily.
Seems the China Daily writer is a bit confused about the subsidiaries of Fujian Motor. Isn’t Soueast a Fujian Motor joint venture with Taiwan’s China Motor (a subsidiary of Taiwan Yulon)and Mitsubishi of Japan?
Also, other sources indicate that this car making operation, of Fujian Motor, will in fact be included in Dongfeng’s acquisition.
But, as he said, the other JV with Daimler will be excluded from the acquisition, as will the King Long subsidiary.
Perhaps we will have to wait until Thursday to be sure.
In any event, the government’s long sought after consolidation of the industry seems to be progressing well.