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BMW to hold 75.0 per cent of BBA
Posted on Thursday, 11 October 2018 12:47
BMW is taking control of the 50:50 sino-foreign equity joint venture formed in 2003 with Brilliance China Automotive Holdings by acquiring a 25.0 per stake for CNY 29.00 billion (EUR 3.64 billion).

The agreement, which follows on from Beijing’s decision in April to open up China’s passenger vehicle market by 2022, values BMW Brilliance Automotive’s (BBA’s) entire 100.0 per cent stake at CNY 115.80 billion, as at 30th June 2018.

Earlier this year, the country’s government announced the relaxation of the foreign ownership restrictions in the automotive sector, meaning BMW would be allowed to set up wholly- or majority-owned manufacturing and distribution operations.

Against this background, the German powerhouse asked partner Brilliance if it could acquire a further 25.0 per cent stake in BBA to increase its holding to 75.0 per cent.

The agreement also comprises an extension to the current joint venture term to the year 2040 from the existing deadline of 2028 and putting in place a long-term business plan for the manufacrturer.

As an integral part of the deal, BMW will introduce new models for specific locations in China, including the X5 and future battery electric vehicles.

In addition, the two have agreed to further increase the production capacity at BBA’s Dadong facility and build a second plant in Tiexi District, Shenyang City, to double this site’s output.

Last year, the venture’s two existing plants produced almost 400,000 vehicles for the Chinese market, representing a 30.0 per cent increase on 2016.

BBA has invested over CNY 52.00 billion in its two facilities in Shenyang since 2009 and intends to inject more than EUR 3.00 billion in new and existing sites over the coming years.

The manufacturer’s business scope will range from producing BMW and Zinoro passenger cars to engines, power batteries, parts and components.

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