SAIC said to seek 1% in GM's IPO

0 CommentsPrint E-mail Shanghai Daily, November 15, 2010
Adjust font size:

SAIC Motor Corp is reportedly planning to buy a 1 percent stake worth US$500 million in General Motors Co's initial public offering.

Buying GM shares will deepen cooperation between the two top auto makers in their respective markets and help SAIC to go global.

However, the deal may face a political barrier since the United States government has blocked several acquisition attempts by Chinese companies on concerns over "national security," industry watchers said.

GM has filed an application to sell about US$10 billion worth of common stock and US$3 billion of preferred shares, making it the second-biggest IPO in the US after Visa Inc and one of the largest globally.

GM plans to price the IPO on Wednesday before shares start trading on the New York and Toronto stock exchanges on Thursday.

SAIC will probably buy a stake of 1 percent or less, Bloomberg News cited people familiar with the matter.

A final decision on SAIC's stake could come within days, Wall Street Journal has reported, citing people close to the matter.

GM and SAIC declined to comment.

Hu Maoyuan, chairman of SAIC, said in mid-October that the company hopes to "support" its long-term partner's IPO on grounds that GM is moving in a very positive direction while the US economy is seen recovering.

Last week, GM reported net earnings of US$4.77 billion in the first nine months of this year and is on track toward achieving its first profitable year since 2004.

Any deal between GM and SAIC on the stake purchase would need Chinese government approval.

The US Treasury also has to weigh the possible political outcry after US taxpayers spent US$50 billion to bail out GM from bankruptcy protection last year, according to the Journal.

Print E-mail Bookmark and Share

Go to Forum >>0 Comments

No comments.

Add your comments...

  • User Name Required
  • Your Comment
  • Racist, abusive and off-topic comments may be removed by the moderator.
Send your storiesGet more from