China’s electric-car giant to list in $4.5bn deal
China’s biggest electric-car maker will gain a stock-market listing in an asset swap valuing the state-backed manufacturer at ¥28.8bn ($4.5bn) and giving investors a chance to participate in the world’s largest market for new-energy vehicles.
One of BAIC Group’s publicly traded affiliates, Chengdu Qian Feng Electronics, will buy Beijing Electric Vehicle Company (BJEV) in a stock sale and assetswap deal. As part of the plan, Qian Feng would sell 761.1million shares at ¥37.66 apiece to all shareholders of BJEV for the acquisition, a BAIC subsidiary said on Monday.
BJEV will become the first state-owned manufacturer of new-energy vehicles to list on a mainland stock exchange, competing for attention from investors who have driven up the share price of BYD, a Warren Buffett-backed car maker that trades both on the mainland and Hong Kong. BJEV — which is disclosing a valuation publicly for the first time — is among companies raising funds and expanding to get a head start as China’s government encourages more clean-energy vehicles to hit the roads.
BJEV’s sales of electric vehicles almost doubled to 103,199 in 2017. The company said it had boosted its share of the Chinese electric-vehicle market to an estimated 23% in 2017 from 15% in 2016. BJEV raised ¥11bn in its latest round of fund raising announced in July, mainly from state-owned companies, following a ¥3bn round in 2016.
China overtook the US in 2015 to become the world’s biggest market for new-energy vehicles as both traditional vehicle makers and a bevy of start-ups worked to meet the government’s target to boost yearly sales of plug-in hybrids and fully electric cars by tenfold in the next decade.
China has made electric vehicles a strategic initiative as part of its push to lead in automotive technology, curb pollution and cut dependence on imported oil.
At January’s Consumer Electronics Show in Las Vegas, Chinese electric-car start-ups were at the forefront. Byton, a Nanjing-based company started by former BMW executives, unveiled a $45,000 SUV. Within days, XPeng Motors, backed by funding from Alibaba, unveiled a production model.
Of the 4,500 exhibitors at the annual event in Las Vegas more than a third were from China.