Chinese automaker SAIC may buy General Motors stake
Report: Carmaker interested in single-digit share of IPO
China's top automaker SAIC has expressed interest in buying a stake in
General Motors once the Detroit automaker begins issuing stock again, a
person familiar with the situation said Sunday.
GM tentatively has planned its initial public stock offering for
mid-November. The stock sale will allow the U.S. Treasury, which owns
61% of GM in exchange for having funded its 2009 bankruptcy, to begin
recouping some of the $50 billion it invested.
SAIC, which is funded by the Chinese government, already has several
joint ventures with GM. The talks to buy an interest in GM are
considered preliminary at this point. How far they proceed will depend
on the U.S. Treasury, said the person, who spoke anonymously because IPO
preparations are confidential.
GM's relationship with SAIC dates back more than a decade, and is
crucial as GM continues to expand its market share in the key Chinese
market. In 2009, one of GM's joint ventures with SAIC was the first
automaker to sell more than 1 million vehicles in China in a single year.
But Chinese investment in GM might not be politically popular in the
U.S. as the communist country continues to grow as a global economic power.
Reuters, which first reported the talks with SAIC, said that SAIC has
expressed an interest in acquiring a single-digit share in GM, citing an
unnamed person with knowledge of the discussion.
The Treasury said late last week that investors in the IPO could come
from "multiple geographies, with a focus on North American investors."
Although the Treasury may decide the SAIC investment is politically
unsuitable, the government and GM likely will have to weigh expressions
of interest from several foreign countries' investment funds.
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