Taking stock of the major events of the Chinese auto industry in 2007, the “Southern Cooperation†staged by the finale is undoubtedly the most incisive stroke. Tomorrow, SAIC, the controlling shareholder of SAIC Motor (600104.SH), and the parent company of the Nanjing Automobile Group, Yuejin Group, will formally sign a comprehensive cooperation agreement in Beijing.
The industry believes that once the “Southern Cooperation†officially enters the M&A process, this may become the largest M&A case in the domestic automobile industry to date. With the integration of NAW Group's entire vehicle business into SAIC Motor, the parts and service trade business will be merged with SAIC Motor to implement the promotion. After the upgrade and expansion, SAIC Motor Group will also be expected to become the largest in China with annual sales exceeding 2 million vehicles. Car carrier."
Sources told the "First Financial Daily" that both parties are planning to hold this historic signing ceremony at the Diaoyutai State Guesthouse on the 26th under the auspices of the National Development and Reform Commission. Yesterday, Shanghai Automotive announced that the company's issuance of convertible bonds was 6.3 billion yuan, and the current public offering has received a total of 83,962,29 billion yuan in funds, creating a record high for frozen funds of this species. . This is undoubtedly a good news for mergers and acquisitions that urgently require funds. Not only that, the workers’ congress held yesterday by the two parties also formally adopted the South-South cooperation program.
Following on April 19th this year, SAIC Chairman Hu Maoyuan first publicly extended an olive branch to Nanjing Automobile Group. On July 30, Shanghai Automotive announced that the controlling shareholder SAIC and Yuejin Group had signed the “All-round Cooperation between SAIC and Yuejin Group. Letter of Intent. According to the letter of intent, SAIC Group and Yuejin Group formed a joint working group to discuss the cooperation and asset reorganization between the two parties in order to realize the full integration of SAIC and Nanjing Auto.
The industry believes that this "comprehensive cooperation in the South" is mainly driven by the government and is also a fully embodied national automobile industry policy. Both parties have jointly acquired assets and brands of Rover UK: SAIC acquired the intellectual property rights of Rover's products and most of its R&D team, while Nanjing Automobile Group owns the intellectual property rights of all equipment and engines of the Longbridge Rover production base in the UK, as well as sports cars. Brand MG. After comprehensive cooperation, SAIC Motor will expand its market share in the commercial vehicle market, expand and enhance its own brand of sedan, and achieve resource sharing. Nanjing Automobile Group can obtain financial, technical, and managerial support from SAIC Motor to increase its profitability. This comprehensive cooperation will help to reduce duplication of investment and will help optimize the allocation of resources of both companies and achieve synergies in R&D, procurement, production, and sales.
It is said that this cooperation will be completed through share exchange, that is, Nanjing Automobile will inject vehicle and parts assets into Shanghai Auto. After injecting assets, Nanjing Auto will hold no more than 10% of Shanghai Auto. In the future, the two brands, MG and Roewe, will co-exist and conduct dual-brand operations, but the two brands will be repositioned to form a mismatch. According to a few days ago, Hu Maoyuan disclosed that although SAIC Passenger Car Company (self-owned brand) currently only owns the Roewe 750 autonomous sedan product, by 2010, with the continuous launch of a full range of autonomous products from Shanghai Automotive's five platforms, the brand is gradually maturing. With successful management experience, it will form a production capacity of 500,000 vehicles and engines and enter the first camp of China's own brands.
The existing net assets of Nanjing Automotive Group are RMB 2.6 billion, including 28 subsidiaries, 7 joint-stock companies, and 400 related companies. Currently, there are three Nanjing vehicle manufacturers, Nanjing Nanjing Fiat and Nanjing Iveco. 200,000 vehicles. In the future, the management of the new NAC will be how it is constructed. At present, many suspense remains.
According to industry forecasts, Shanghai Automotive’s executive vice president Chen Zhixin is likely to be at the helm of Nanjing Auto, and it is reported that SAIC has made a decision that Chen Zhixin will take charge of its own brand business.