GAC Group and FAW Group’s Joint Venture Agreement
Chinese carmaker GAC Group has signed a letter of intent with FAW Group to purchase part of FAW’s equity interest in an unnamed automotive joint venture (JV). This planned acquisition is set to occur through a share issuance by GAC, accompanied by a fundraising exercise.
Details of the Transaction:
- GAC has not disclosed the name of the JV, citing its involvement with a foreign-listed company. Further information will be provided once the restructuring plan is finalized.
- Trading in GAC’s A shares was suspended on September 14, 2026, following the announcement of this transaction.
- The deal will be classified as a material asset restructuring and a connected transaction, but it will not change the ultimate controlling party of GAC or lead to a backdoor listing.
Overview of the Joint Venture:
- The JV is involved in various activities within the automobile manufacturing sector, according to China’s Classification of National Economic Industries. Its business scope includes:
- Technical services and technology development
- Research and manufacturing of auto parts
- Sales of new vehicles and parts
- Motor vehicle repair and maintenance
- Manufacturing and selling automotive decorative products
- The JV holds licenses for road motor vehicle production and vehicle inspection and testing.
FAW Group Profile:
- FAW was established as a joint-stock company on June 28, 2011, and is based in Changchun, Jilin Province.
- Its operations encompass vehicle manufacturing, including new energy vehicles, and the design and manufacture of various automotive parts, alongside sales of new and used vehicles.
This letter of intent represents a preliminary step, with terms still subject to a formal agreement and regulatory approval.
