Volkswagen will buy 20% of the Chinese manufacturer of batteries Guoxuan

Volkswagen will buy 20% of the Chinese manufacturer of batteries Guoxuan

January 20, 2020 0 By autotimesnews

Volkswagen AG intends to acquire a 20% stake in the Chinese manufacturer of electric car batteries, Guoxuan High-tech Co Ltd, as the German company accelerates its electric breakthrough into the world’s largest automobile market.

This deal marks the first direct ownership of Volkswagen by a Chinese battery manufacturer and will result in the Wolfsburg automaker striving to supply 1.5 million new electrified vehicles (NEVs) per year in China by 2025, including plug-in hybrid cars. According to two sources familiar with the situation, the leading foreign automakers in China plan to acquire a stake in Guoxuan, registered in Shenzhen, by offering private shares at a discount. Based on Guoxuan’s market capitalization of $ 2.8 billion, a 20% stake in the company currently costs about $ 560 million.

Following the purchase of the package, Volkswagen will become the second largest shareholder in the battery manufacturer with a 20% stake after Zhuhai Guoxuan Trading Ltd, a company controlled by Guoxuan founder Lee Zheng, which currently owns 25%. Guoxuan shares rose a maximum of 10% on Friday news.

Volkswagen declined to comment. Guoxuan and the China Securities Regulatory Commission did not immediately respond to Reuters requests. The head of the secretary’s office, Guoxuan, told the government-sponsored Securities Times that he had not yet received news of the acquisition of the stake.

Note that Guoxuan is one of the middle-tier Chinese manufacturers of batteries that work with CATL and BYD. It is based in the eastern Chinese city of Hefei, where Volkswagen is also building electric cars with JAC Motor, one of its Chinese joint venture partners.