Chinese state-backed investors are looking to take BMW’s main Chinese joint-venture partner Brilliance private, five people with knowledge of the matter told Reuters, in the latest such deal targeting beaten down Hong Kong-listed stocks, reported Reuters.
The deal to take it private would be led by state-controlled Liaoning Provincial Transportation Investment Group, which owns 12% of the automaker, the sources said. Based in northeastern Liaoning province, Brilliance is 30% owned by Huachen Group, which is majority-owned by the provincial state asset regulator.
The privatization would come ahead of BMW buying another 25% to take control of the JV – BMW Brilliance Automotive (BBA) – for 3.6 billion euros ($4.2 billion) in 2022.
Based on that offer, Brilliance’s current 50% stake in the venture, which contributed to almost all the listed firm’s profit in 2019, would be worth 7.2 billion euros ($8.4 billion), 83% higher than its market value. Its stake will halve to 25% after BMW increases its share.