August 18, 2010 / 8:45 AM / 9 years ago

CORRECTED - CORRECTED-UPDATE 1-Beijing Auto to acquire Guangzhou Baolong

(Corrects to remove stock RIC code linked to BAIC in first para)

* BAIC to acquire Baolong, securing foothold in south China

* To invest $736 mln in southern China plants (Adds details, background)

BEIJING, Aug 18 (Reuters) - Beijing Automotive Industry Holding Co (BAIC) said on Wednesday it had agreed to take over smaller rival Guangzhou Baolong, securing a foothold in the competitive southern China market.

BAIC, a China partner of Daimler AG (DAIGn.DE) and Hyundai Motor Co (005380.KS), will also invest 5 billion yuan (about $736 million) to expand Guangzhou Baolong’s existing plant in southern China and to add a new plant, the company said in a statement.

BAIC, which had earlier acquired some assets of Saab from General Motors, has been planning to expand its national presence in China, now the world’s largest auto market.

The deal, if it goes ahead as planned, will give Beijing-based BAIC a foothold in southern China, where Guangzhou Automobile and its partners, Toyota Motor (7203.T) and Honda Motor (7267.T), dominate.

Volkswagen AG (VOWG.DE), strong in northern and eastern China, also plans to build a greenfield facility in southern China with a maximum annual capacity of 300,000 units. ($1=6.792 YUAN) (Reporting by Fang Yan, Michael Wei and Ken Wills)

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