Largest acquisition case in China's auto industry completed

As the domestic auto industry's largest acquisition case, comprehensive cooperation between SAIG and Southern Automobile was finally settled. The Shanghai Automotive Industry Group and Yuejin Motor Group (the share holders of Southern Automobile) held a cooperation signing ceremony on Thursday in the Great Hall of the People.

According to reports, the Yuejin group's automotive business will be fully integrated into SAIG as a condition of the comprehensive cooperation agreement between SAIG and Yuejin. The vehicle and close parts assets will be part of the Shanghai Automotive Group under SAIG's holdings. Spare parts and service assets will fall under the Donghua Company, which is a joint venture of Yuejin and SAIG. Shanghai Automobile will invest 2.1 billion yuan to buy Yuejin's vehicle and close parts assets. Yuejin will hold 320 million shares of Shanghai Automobile and a 25% stake in the group.

At the same time, according to the preliminary plan agreed upon by SAIG and Yuejin, the two sides will share complementary advantages and resources in capital, research and development, marketing, manufacturing, procurement; and have a synergistic effect on vehicle and parts and components affairs, as well as in domestic and international business.

Through comprehensive cooperation, the Shanghai Automobile Group will become China's largest world-class automobile enterprise, and will make Southern Automobile into an important vehicle manufacturing base in China. SAIG and Southern Automobile production and sales are expected to surpass 1.76 million – the largest in China. By 2010, the production scale of Southern Automobile's manufacturing base will be three times that of its current.