Sep 25, 2018 (China Knowledge) - Real estate giant China Evergrande Group is set to purchase a minority stake in Guanghui Group for RMB 14.49 billion, becoming the second-largest shareholder.
Evergrande purchased 23.87% of shares from shareholders for RMB 6.68 billion and will further invest RMB 7.81 billion into Guanghui Group. At the end of the deal, Evergrande will hold a 40.96% stake in Guanghui.
Guanghui currently markets 57 car brands at its 737 dealerships across China and is the world’s largest BMW dealer.
The two companies look to work together in the fields of vehicle sales, energy, real estate and logistics. Guanghui saw its net profits before tax rise by 24% to RMB 5.92 billion in 2017, compared to a year before.
Evergrande has recently been diversifying its business and has now committed around USD 3 billion to the auto industry. Evergrande Health, a unit of Evergrande Group, spent USD 865 million to buy a 45% stake in electric vehicle start-up Faraday Future earlier in June.
The move by Evergrande comes amidst expectations of incoming property market curbs due to soaring local property prices. Earlier in April, China Evergrande announced plans to commit RMB to initiatives in the life sciences, aviation, quantum technology, new energy, artificial intelligence, robotics and modern agriculture in the next decade.
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