Higher auto sales drive takeover appetites

Beijing’s plans to spur sales in the domestic auto industry continue to be successful, with auto sales up 34% in May despite what we’re all hearing about economic doldrums. The sound of that success? Likely a kind of high-pitched whining, since a lot of sales growth has been in cars of the small-engined (less than 1.6 liters) variety. Still, domestic automakers are doing well enough – and their foreign counterparts doing poorly enough – that they’re still entertaining the idea of buying out foreign brands. The latest talk is that Beijing Automotive Industry Corp (BAIC) may by eyeing GM’s Saab following the likely failure of its late bid for Opel, another GM brand. More outbound investment news in the latest chapter of China Minmetals’ planned investment in OZ Minerals. Readers may remember that Minmetals had an earlier takeover bid nixed when Australian regulators suddenly (conveniently?) discovered that it included a mine located within a military zone. Now, however, OZ has shown its interest in a revised Minmetals bid by rejecting a recapitalization plan brought by RFC Corporate, an Australian investment and advisory business, and Canada’s RBC Capital Markets. OZ shareholders will now vote on the Minmetals offer.