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[YesAuto News] On the evening of May 30th, Changan Automobile (sz000625) issued an announcement stating that its controlling shareholder, China Changan, transferred 1.035 billion A shares (21.56% of the total share capital) of the company to Ordnance Equipment Group for free. Has been approved by the State-owned Assets Supervision and Administration Commission of the State Council.

This means that the state-owned shares of the listed company-Chongqing Changan Automobile Co., Ltd. (“Changan Automobile”) will be transferred from the original controlling shareholder-China Changan Automobile Group Co., Ltd. (“China Changan”) To the higher-level parent company-China Ordnance Equipment Group Co., Ltd. (referred to as “Ordnance Equipment Group”).

The Ordnance Equipment Group is a super large state-owned key enterprise directly managed by the central government, and one of China's top ten military industrial enterprises. After directly holding 21.56% of Changan Automobile's shares, Bingzhuang Group's right to speak in listed companies will be further strengthened. In the future, Bingzhuang Group will exercise 21.56% of the voting rights on Changan Automobile, and the operation will be more direct.

Since the transfer of shares is carried out within the controlling shareholder and its parent company, the actual controller of Changan Automobile has not changed. So why does the transfer take place? In connection with the recent series of changes in Changan Automobile, it is widely speculated in the industry that this is related to the merger of the three state-owned automobile groups of FAW, Dongfeng and Changan. There is a possibility that Changan Automobile will first transfer part of its equity to the Ordnance Equipment Group to strengthen the controlling rights of the Ordnance Equipment Group, and then the Ordnance Equipment Group will transfer part of the equity of Changan Automobile to form the largest automobile group together with Dongfeng and FAW. .

In fact, as early as three years ago, the cooperation of the above-mentioned state-owned enterprises had already begun. Since 2015, FAW, Dongfeng, and Changan have had four high-level adjustments and exchanges. In December 2017, China FAW Group, Dongfeng Motor Group, and Changan Automobile Co., Ltd. signed a strategic cooperation agreement. The three parties will develop in four major areas: forward-looking common technology innovation, automotive full value chain operation, joint overseas “going out”, and new business models. All-round cooperation, this also marks the start of comprehensive cooperation among the “national team” of China's auto industry.

The newly exposed “Regulations on Investment Management in the Automobile Industry (Draft for Comment)” also clearly stated, “Encourage companies to conduct mergers and acquisitions and strategic cooperation through equity investment”, “form industrial alliances and industrial consortia” and so on. With policy support and encouragement and intensified market competition, the national team will be re-integrated, and the trend of forming a major league has become more and more obvious.