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General Motors in pact with Shanghai Auto
4 December 2009: General Motors (GM) has reportedly reached an agreement with Shanghai Automotive Industry Corporation (SAIC) for setting up a 50:50 JV that will take over GM's Indian assets.
Besides, GM is likely to sell a 1 per cent stake in the existing equal JV with SAIC in China. According to sources, this will be in exchange for cash and an increased stake in a second, three-way Chinese venture (SAIC-GM-Wuling Automobile, where SAIC has 50.1 per cent, GM 34 per cent and the city of Liuzhou holds the rest).
However, financial details of the proposed deal have not been disclosed.
The India venture, to be set up in Hong Kong, will make and sell minivans, mini-trucks and small cars to tap demand for low-cost vehicles.
GM's Chinese JV with SAIC makes a range of GM cars. Under the deal, GM would sell a 1 per cent stake in the venture to SAIC, raising the Chinese automaker's share to 51 per cent, although GM would retain equal voting rights in company decisions and have an option to buy back the stake later.
Source: DNA