Volkswagen says China OKs bigger stake in venture with FAW
China has given Volkswagen a green light to raise its stake in a joint venture with local partner and state-owned automaker China FAW Group Corp.
"The Chinese government has approved in principle a possible increase in the stake," a VW spokeswoman said Thursday.
VW and FAW have set up internal working groups to evaluate the move and have jointly hired external consultants to value the stake in FAW-Volkswagen. "This is a standard worldwide process for the transfer of shares which, along with the negotiations, will last for some time," the spokeswoman said.
Analysts at Evercore ISI said the joint venture, in which VW holds a 40 percent stake, was of major importance to the German automaker. "We assume the total value of the JV is in the area of 50 billion euros (421 billion yuan), which would imply that increasing its stake from 40 percent to 50 percent could cost VW 5 billion euros," they said.
VW's two joint ventures, Shanghai Volkswagen Automotive Co. and FAW-Volkswagen Automotive Co., delivered 3.7 million vehicles in China in 2014, up 12 percent. VW has 29 assembly plants, engine plants and component factories in China.
On April 29, Volkswagen CFO Hans Dieter Poetsch said the carmaker had plans for mergers or acquisitions beyond its talks with FAW.
VW and FAW have set up internal working groups to evaluate the move and have jointly hired external consultants to value the stake in FAW-Volkswagen. "This is a standard worldwide process for the transfer of shares which, along with the negotiations, will last for some time," the spokeswoman said.
Analysts at Evercore ISI said the joint venture, in which VW holds a 40 percent stake, was of major importance to the German automaker. "We assume the total value of the JV is in the area of 50 billion euros (421 billion yuan), which would imply that increasing its stake from 40 percent to 50 percent could cost VW 5 billion euros," they said.
VW's two joint ventures, Shanghai Volkswagen Automotive Co. and FAW-Volkswagen Automotive Co., delivered 3.7 million vehicles in China in 2014, up 12 percent. VW has 29 assembly plants, engine plants and component factories in China.
On April 29, Volkswagen CFO Hans Dieter Poetsch said the carmaker had plans for mergers or acquisitions beyond its talks with FAW.
