GAC to form Mitsubishi JV based on GAC Changfeng

HONG KONG Sat Nov 6, 2010 1:32am EDT

HONG KONG Nov 6 (Reuters) - Guangzhou Automobile Group (GAC) (2238.HK) said it intends to set up a joint venture with Japan's Mitsubishi Motors Corp (7211.T) based on Shanghai-listed GAC Changfeng 600991.SS.

GAC Changfeng, which is 29 percent owned by GAC and 14.59 percent held by Mitsubishi, makes vehicles with Mitsubishi and other brand names, and provides automobile components.

GAC said it signed a memorandum of understanding (MOU) with Mitsubishi on Friday with the intention to convert GAC Changfeng into a 50/50 joint venture and GAC Changfeng would be delisted.

The joint venture will be the base for their collaborative business in China, GAC said in a statement late on Friday.

Details or terms for the delisting were not immediately available.

GAC Changfeng shares closed at 14.07 yuan on Oct. 27 prior to a trading suspension, taking its total market value to $1.1 billion.

GAC, the largest automaker in south China, said it also signed a MOU with Hunan government for strategic cooperation. (Reporting by Alison Leung; Editing by Alex Richardson)

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