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HONG KONG/BEIJING (Reuters) - Volkswagen AG (VOWG_p.DE) is set to take a 20% stake in Chinese electric vehicle battery maker Guoxuan High-tech Co Ltd (002074.SZ), two sources told Reuters, as the German firm accelerates its electric push into the world’s largest auto market.
The deal would mark Volkswagen’s first direct ownership in a Chinese battery maker and comes as the Wolfsburg-based automaker strives to meet a goal of selling 1.5 million new energy vehicles (NEVs) a year in China by 2025, including plug-in hybrid cars.
The top foreign automaker in China plans to acquire the stake in Shenzhen-listed Guoxuan via a discounted private share placement in the coming weeks, the two sources with knowledge of the matter said. Based on Guoxuan’s market capitalization of $2.8 billion, a 20% stake in the company at present is worth about $560 million.
The deal’s details have been mostly finalized and the two firms are waiting for new Chinese regulatory rules on private share placements that will provide a more flexible pricing mechanism and shorter lock-up periods for majority shareholders, said one of the people, speaking on condition of anonymity.
After the stake purchase, Volkswagen will become the battery maker’s second-largest shareholder with a 20% stake, behind Zhuhai Guoxuan Trading Ltd, a firm controlled by Guoxuan’s founder Li Zhen, which currently holds 25%.
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