Volkswagen China last week agreed to acquire a 26.5% stake in China’s third largest EV battery manufacturer Hefei Guoxuan High Tech Power Energy Company, also known as Gotion, to become the company’s largest shareholder.
Guoxuan, based in Hefei, the capital of Anhui province, will issue 441m new shares which will be transferred to Volkswagen in a deal understood to be worth around EUR1bn.
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By GlobalDataThe company’s management and founding shareholders, led by chairman Li Zhen, will continue to hold a combined 303m shares in the company.
According to local reports, it was agreed Li Zhen would remain in his position as chairman for at least 36 months from the date of the share transfer to Volkswagen.
In this period, the German automaker will hold 13.2% of the company’s voting rights while the founding shareholders will have 18.2%.
At the end of the 36 month period, VW will have the largest voting rights, in line with its shareholding.
Volkswagen is the largest foreign brand in China, with its three joint ventures, FAW-Volkswagen, SAIC-Volkswagen and JAC-Volkswagen, accounting for 4.23m sales last year.
Volkswagen has also been given the go ahead to increase its stake in the JAC joint venture, which is focused mainly on electric vehicles, from 25% to 75%, ahead of planned capacity expansion to 400,000 vehicles per year.
Guoxuan was estimated to be China’s third largest manufacturer of automotive lithium ion batteries after CATL and BYD.
