SAIC In Discussions To Buy UK's MG Rover
Shanghai Automotive Industry Corp. (SAIC), China's largest
passenger carmaker, plans to buy MG Rover, say sources
in England and China. Discussions are now under way.
SAIC will boost its ambitions to become the world's sixth-largest
automaker by taking an initial equity stake in MG Rover.
The size of that stake is still under discussion. Booming
car sales in China, especially in 2003 and this year have
contributed to SAIC's financial position, since the company
is a partner with GM and Volkswagen for their manufacuting
operations in China.
MG Rover has denied that SAIC will take over the company.
But sources in China and at MG Rover in Longbridge, England,
say SAIC would like to own MG Rover outright and will
take control of the British automaker in the long term.
A Chinese source says that SAIC will buy MG Rover outright,
and that an announcement will be made in the next few
months.
A source at MG Rover confirmed that there is a longer-term
plan for the Chinese manufacturer to take over the British
company, though terms and details have not been ironed
out.
The transaction would be in steps, and it could be several
years before SAIC would own all of MG Rover. Initially,
the relationship would start as a joint venture, but will
develop into an outright purchase.
If China's automobile sales continue along their current
trajectory, SAIC's position will become stronger.
MG Rover is best known for its sports cars which were
popular during the sixties. Since then, it has been a
niche player.
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