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Dongfeng Listed Honda Sold All The Shares Of Guangzhou Honda Will Be Wholly-owned Acquisition
Jan 02, 2018

Dongfeng listed Honda sold all the shares of Guangzhou Honda will be wholly-owned acquisition

Dongfeng Honda listed for sale all the shares of China

GAC acquired a wholly owned subsidiary of Honda China; Guangzhou Automobile bought and bought can not stop buying, Dongfeng continued to sell assets

Beijing News (Reporter Zhao Yibo) Honda China equity changes are entering a substantive stage. On January 1, the Beijing News reporter saw on the website of the Shanghai Stock Exchange that Dongfeng Motor Co., Ltd. (10%) owned by Honda Automobile (China) Co., Ltd. ("Honda China") To 100 million yuan. Listed projects show that Honda Chinese shareholders intend to transfer all the shares they hold.

Guangzhou Automobile Honda will wholly acquire Honda China

The equity change has a precedent. As early as December 16, 2017, Guangzhou Automobile Group had made an announcement that it would transfer the 25% equity of Honda Motor (China) Co., Ltd. held by the Company to the public through the open market with a reserve price of about 232 million yuan.

Guangzhou Automobile Group also said that after obtaining the approval of relevant government departments, its joint venture GAC Honda Automobile Co., Ltd. will acquire and transfer 100% equity of Honda Motor (China) Co., Ltd. through the public market transfer and the agreement. The total investment of the project is planned to exceed 1.2 billion yuan, and the sources of funds are self-financing by the enterprises.

Honda China, established on September 8, 2003, is the first vehicle manufacturer to export 100% of China's automobile history. The company consists of Honda Motor Co., Ltd. (holding 55%), Honda Giken (China) Investment Co., Ltd. (holding 10%), Guangzhou Automobile Group Co., Ltd. (holding 25%) and Dongfeng Motor Group Co., Ltd. Holding 10%) jointly funded the establishment of a joint venture 30 years of age, a registered capital of 82 million US dollars.

Today, Dongfeng has decided to withdraw.

If the above equity transfer is successfully completed, Honda China's ownership structure will be completely changed, GAC Honda from a wholly owned subsidiary of Honda China a step closer.

Why did Honda China, which owns Honda in China, wholly acquire Honda China through its joint venture?

Cui Dongshu, secretary-general of the Federation of the People's Republic of China, previously told the media that GAC Honda's production capacity is not very abundant, so China wants to acquire Honda's capacity in China. It is understood that there are three Guangzhou Automobile Honda production lines, with a total annual production capacity of 720,000. Guangzhou Automobile Honda need to expand channels to enhance production capacity to meet the market.

In 2016 Fortune Global 500 rankings, GAC ranked 303rd with a revenue of 34.44 billion U.S. dollars, up 59 places from 2015, up by 16.3%.

Honda China does not have the domestic sales qualification

On January 2, the Beijing News reporter saw on the website of Shanghai Stock Exchange that since January 2, Dongfeng Motor will sell its 10% stake in Honda China to the listed company for a consideration of RMB 94.87 million.

According to the information of listed projects, Honda Giken Industries, Honda Giken Industries (China) Investment Co., Ltd. and Guangzhou Automobile Group Co., Ltd. all proposed to transfer the entire equity interests held by them. However, as of the listing date, the equity transfer has not yet entered a substantive stage.

According to official website, Honda Chinese company mainly engaged in vehicle production and global KD parts export business, which is located in Guangzhou, Guangdong Province, export processing zone, covers an area of 450,000 square meters, employs about 800 people. Companies with welding, painting, engine assembly, vehicle assembly and vehicle inspection processes, with a new model center, test runway and other infrastructure. The total investment of 125 million US dollars, the production capacity of 60,000 / year (two shifts production).

Data show that Honda China's profits are meager.

According to the Shanghai Stock Exchange, in 2016, Honda China's operating income was 3.2 billion yuan and its net profit was -137 million yuan. From January to October 2017, its operating income was 257 million yuan and its net profit was 13.64 million yuan.

It is noteworthy that, given Honda China's government-approved business scope for the production and export of sedans and their parts and components, import and export business of sedan parts and related after-sales service, Honda China does not have the qualification for domestic sales.

Dongfeng Group continued to sell assets

Recently, Dongfeng Group continued to sell assets, the sale of Honda shares in China is the recent divestment of assets, the latest move.

Public information shows that in June 2017, Dongfeng Electric Vehicle Co., Ltd., a subsidiary of Dongfeng Motor, signed an asset transfer agreement with Dongfeng Real Estate to transfer its investment properties located in Wuhan Economic and Technological Development Zone in Hubei Province at a price of 204 million yuan and At that time, DFG said at the time that the transaction would help its affiliated companies to divest non-core assets and investments, centrally manage resources and funds, and focus on the main business of electric vehicles.

In September 2017, Dongfeng Motor approved the transfer of 85% equity interest of Dongfeng Industrial Co., Ltd. (hereinafter referred to as Dongfeng Industrial). On November 13, Dongfeng examined and approved the transfer plan and proposed to transfer Dongfeng Water Company to Capital Group at no expense and transfer the electricity department of Dongfeng Motor Company to State Grid at no charge, and transfer the Dongfeng Motor Company's thermal power plant to Beijing Energy Group at no consideration.

By the end of November, Dongfeng signed a framework agreement with China Resources Group Co., Ltd. to formally start the separation and transfer of Dongfeng Property Management.

On the website of Shanghai Stock Exchange, on November 30, 60% equity of Shenzhen Dongfeng Import & Export Co., Ltd. was listed for sale at a price of RMB7.67 million.

By the beginning of December, Dongfeng Motor plans to make an offer of about 872 million yuan to acquire 80% of the shares of Dongfeng Motor Real Estate Co., Ltd. (hereinafter referred to as Dongfeng Real Estate) which is 100% -owned and also listed on the Shanghai Stock Exchange. This is also an asset sale with a higher amount.

According to the listed projects, Dongfeng Real Estate is responsible for the Dongfeng Phoenix City project is limited to the price of housing projects, residential ceiling price of 4,000 yuan / square meters, the project developed and completed a loss, due to continue to follow the current construction costs And double-limit land-use conditions for development, the project will expand losses, so Dongfeng Real Estate has been suspended development.

■ Extend

Attack of the Guangzhou Automobile 255 billion in cash expansion of the acquisition can not stop

While Dongfeng wants to quit, GAC is overweight Honda China.

GAC Group said in December 2017 that GAC Honda Motor Co., Ltd., a joint venture of the Company, will acquire and transfer 100% equity interests in Honda Motor (China) Co., Ltd. through the public market transfer and the agreement. The total investment of the project is planned to be 1.206 billion yuan, with the source of funds being self-financing by the enterprises.

The latest data show that Guangzhou Auto Honda cumulative sales of 663,553 units from January to November, an increase of 10.6% over the previous year, has exceeded the full-year 2016 sales. From the GAC Group as a whole, last year's auto sales hit a record high, the annual car production and sales are expected to reach 2 million.

It is noteworthy that this time Guangzhou Automobile Group wholly owned by Guangzhou Honda Automobile Honda China, and another two years ago, the capital movements are more similar. At that time, GAC Mitsubishi announced that it would integrate Mitsubishi Motor's imported car business by way of a share purchase and import Mitsubishi into a 100% subsidiary of GAC Mitsubishi.

Recently, Guangzhou Automobile continued to throw generous investment.

On December 28, 2017, GAC and WeiLao Automobile held the signing ceremony of the strategic cooperation and new energy vehicles project in Guangzhou. Both parties will co-finance the establishment of GAC WeiLai New Energy Vehicle Co., Ltd. (tentative name). The company plans the total investment 1.28 billion yuan, the registered capital of 500 million yuan, of which Guangzhou Automobile, Wei to share of 45%, respectively, 55%. This is another JAC after the JAC and OEMs launched another major cooperation.

In cooperation with Wei to car before, Guangzhou Automobile in June 2016 also had a joint venture with LeTV. However, music as now has been plunged into full problems.

Guangzhou Automobile Group said that this cooperation is conducive to the Company to enhance its resource advantages, to achieve a breakthrough in new energy vehicles, intelligent, shared and other aspects of a positive role in promoting.

Guangzhou Automobile's latest move is in the January 1.

According to the announcement, Guangzhou Automobile Group and Guangzhou Public Transport Group signed a strategic cooperation framework agreement. Both parties will cooperate on the Internet + mobile travel, energy-saving and new energy vehicles, transportation services, smart travel and smart transportation.

Guangzhou Automobile Group to continue the generous investment behind, depends on the large amount of cash on their books.

Earnings reports, as of the end of September 2017, Guangzhou Automobile's asset-liability ratio was 42.5%, the end of the currency funds as high as 25.5 billion yuan. By the end of November, however, GAC Group issued a non-public offering of A-shares stock issuance report, marking the completion of a fixed-capital increase of up to 15 billion yuan.