China’s biggest automaker SAIC is in talks to purchase a 1% stake in General Motors (GM) for about US$500 million, the Wall Street Journal reported. GM is planning to sell US$1 billion worth of shares to Middle Eastern and Asian sovereign wealth funds, equating to about 16% of the total shares the auto giant will sell in its initial public offering this week. SAIC and GM have been partners in a mainland joint venture since 1997. The two companies also have a joint venture in India. China, the world’s biggest car market, has been a strong revenue contributor for GM, which is now the biggest-selling foreign brand on the mainland. This year marked the first time that GM sold more vehicles in China than in the US. GM hopes to raise about US$13 billion in its forthcoming share offer in order to repay the US government following its bailout during the financial crisis.
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