China's SG Auto, CSR establish electric vehicle development agreement
Liaoning SG Automotive Group (SG), one of China's leading bus manufacturers, has reached an agreement with CSR Zhuzhou Institute Co. (CSR), a producer of electric locomotives, to jointly develop alternative energy vehicles, particularly electric automobiles. The pairing of SG and CGR is being hailed by analysts as a "combination of giants" and is part of China's grand plans to boost the development of battery-powered vehicles.
Terms of the agreement are rather complicated. Dandong Huanghai Automobile Co., a subsidiary of SG, will pay 137 million yuan ($20.76 million U.S. at the current exchange rate) to gain a 35.71-percent stake in CSR's Times Electric Vehicle Co. division. In return, CSR will have to dish out 127 million yuan ($19.16 million U.S.) for a 34-percent share in one of Dandong's Huanghai subsidiaries, Changzhou Huanghai Automobile. With numerous companies and their subsidiaries involved, the scale of the agreement is difficult grasp. However, since both SG and CGR are heavyweights in their respective industries, insiders are suggesting it'd be a let down if anything less than an immense plan stemmed from this deal.
[Source: English People's Daily]
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