China's GAC Group shares suspended after report on FAW's potential equity investment

Shares of China's Guangzhou Automobile Group (2238) were suspended from trading on Monday after a media report said another local automaker, FAW Group, is pursuing a plan to acquire a stake in GAC.

• Financial media outlet Caixin reported on Sunday that the state-owned FAW might obtain shares in GAC Group through asset allocation, potentially establishing a joint venture between the two automotive companies, citing two sources familiar with the matter.
• FAW Group owns the "Hongqi" brand and commercial vehicle maker FAW Jiefang Group.
• Both FAW and GAC are key joint-venture partners of Japan's Toyota Motor Corp in China, operating FAW Toyota and GAC Toyota, respectively.
• The size of FAW's potential stake in GAC and specific method of the acquisition have yet to be determined, Caixin reported.

Reuters

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