Shanghai Automotive group buys Nanjing competitor

Beijing - Shanghai Automotive Industry Corp (SAIC) on Wednesday signed an agreement to purchase businesses of competitor Nanjing Automobile Group Corp, the Shanghai Daily reported. According to the deal, SAIC Motor Corp is to give 320 million shares (4.88 per cent) of SAIC Motor and 2.1 billion yuan (286 million dollars) in exchange for the Nanjing Automobile's car assembly and component businesses. The deal makes SAIC into the largest car manufacturer in China, the report said. The two companies are also to created a joint venture to run other Nanjing Auto businesses. Nanjing Auto is to have 25 per cent ownership of the venture. The Chinese government has been urging consolidation among the 47 car makers (foreign and domestic) currently operating within the country's borders. Shanghai Auto has more than 17 per cent of the country's car market, the report said. © 2007 dpa - Deutsche Presse-Agentur

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