SAIC likely to buy less than 10 percent of GM
General Motors (GM), the largest automaker in the United States, will soon launch an initial public offering (IPO) this fall. As GM's strategic partner, China's top automaker SAIC Motor Corporation recently said that it is paying close attention to the IPO and wishes the offering to be a success, according to a report by the Oriental Morning Post.
Reuters yesterday quoted a person familiar with the situation on Sept. 18 as saying that in informal contact with GM, SAIC expressed an interest in acquiring a "single-digit" share in GM.
Insiders believe that in the run-up to GM's IPO, SAIC's non-committal attitude has made the situation quite delicate.
SAIC Chairman Hu Maoyuan said in an earlier interview, "so long as it is a win-win situation, we will join."
There is speculation that SAIC's participation in the offering will show the company's confidence in GM, thereby helping the U.S. automaker attract the attention of more investors to ensure the success of the IPO. SAIC may buy shares in return for GM's previous kindness.
However, the U.S government, the biggest obstacle to SAIC's acquisition of a small stake in GM, should not be forgotten. In recent years, acquisition attempts by several Chinese companies all failed because of political factors. GM is the most important auto company in the United States, so allowing a Chinese company to be a stakeholder in GM will cause greater concern among Americans.
GM has imposed certain limitations on investors outside the United States in its S-1 IPO filing. In addition, according to U.S. law, a strategic investor is required to file a Schedule 13D form with the Securities and Exchange Commission, after purchasing more than 5 percent of the stock of a publicly-held company in the United States.
