British carmaker MG Rover said it was on the brink of signing a US$1.85bn deal with Shanghai Automotive Industry Corporation (SAIC) to set up a new company to produce cars for the Chinese market. The deal with China's largest automaker will help secure a future for MG Rover's main plant at Longbridge, near Birmingham, the BBC reported. The deal is designed as a marriage of MG Rover's established design and technology capabilities with much needed cash supplied by SAIC. Ownership of the new company, which will build cars in China, will be split 70-30 between SAIC and MG Rover. The announcement follows rumors of a Chinese takeover of the troubled British carmaker, but MG Rover chairman John Towers said the company would remain in British hands. He said that under the new deal, he expected to the new company to be producing 200,000 cars a year by 2007.