|AP / Eugene Hoshiko|
SAIC Motor President Chen Hong, left, greeted GM Vice Chairman Thomas Stephens in Shanghai in August.
With symbolism abounding, the U.S. and Chinese economies are likely to be further wedded with news that China’s biggest auto manufacturer, SAIC Motor Corp., is set to buy a 1 percent stake in U.S. car maker/American icon General Motors.
China already is America’s biggest debt holder, and an ongoing spat over currency values has shown that the world’s second-largest economy is coming into its own. —JCL
The Wall Street Journal:
In a sign of the changing fortunes of the world’s top two economies, China’s biggest auto maker, SAIC Motor Corp., is negotiating to acquire a stake of about 1% in General Motors Co. worth about $500 million, according to a person familiar with the matter.
The U.S. auto maker also is prepared to sell more than $1 billion worth of shares to sovereign wealth funds in the Middle East and Asia. Combined, the sales would give foreign investors roughly 16% of the shares to be sold next week under an initial public offering of stock, and give them a stake of some 4% in the Detroit auto maker. GM declined to comment on the investment talks.
The issue of overseas investors buying GM shares in the company’s IPO has been a sensitive one for the U.S. government, which plans to reduce its 61% stake in the auto maker to around 35% through the IPO.
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