ChinaToyota’s two Chinese partners are moving toward becoming one. GAC Group has signed a letter of intent with China FAW to buy FAW’s 50% stake in FAW Toyota, the venture that builds the RAV4 Rongfang, twin of the Toyota Wildlander that GAC Toyota sells. If it closes, GAC would end up holding a piece of both of Toyota’s Chinese joint ventures at once.
Nothing has closed. GAC would pay for FAW’s stake by issuing new shares to FAW, priced at 5.75 yuan each, but the total price and the number of shares depend on an audit and valuation that has not finished. GAC’s board still has to review the deal again, shareholders have to approve it, and it needs sign-off from the Shanghai Stock Exchange and registration with China’s securities regulator. GAC said completion remains uncertain. Its A-shares, halted on 14 September when the letter of intent was announced, resume trading on 29 September.
In return, FAW would become GAC’s second-largest shareholder. Yicai Global reports the two ventures’ sales arms could also be merged.
The change is to Toyota’s ownership chart, not its cars. FAW Toyota and GAC Toyota still run their own factories and dealer networks and sell near-identical products under the same badge.
