Stellantis’ desire to increase its shareholding in the joint venture with Gac lasted less than six months. It was in fact January 27, 2022 when the desire to increase its shareholding in Gac-Stellantis from 50% to 75% was communicated. “The announcement is a key element of Stellantis’ plan to build new bases for its business in China,” the note read. Gac-Stellantis is, or it should be said was, a joint venture formed in March 2010 between the Chinese Guangzhou Automobile Group (Gac Group) and the group led by Carlos Tavares. However, already in January it was understood that the operation was uphill, after the braking by Gac on a possible increase in the share of Stellantis.
Jeep in China, production stop
Due to the lack of progress in the previously announced plan for the acquisition by Stellantis of a majority stake in the Gac-Stellantis joint venture, the Italian / French / American group today announced its intention to focus on the distribution of products of import for the Jeep brand in China. The joint venture had in fact the main objective of producing Jeep models in the Changsha plant. Stellantis will collaborate with the Gac Group for an orderly termination of the joint venture, which in recent years has been at a loss, and will recognize a non-monetary impairment charge of approximately 297 million euros in the results of the first half of 2022.
Dongfeng leaves Stellantis
In addition to the end of the joint venture with Gac, Stellantis and Dongfeng Motor have entered into an agreement relating to the 99.2 million ordinary shares of Stellantis owned by Dongfeng, which represent 3.16% of the share capital of Stellantis. In accordance with the HoA, Dongfeng may from time to time make an offer to sell to Stellantis, of all or a portion of the Stellantis common stock held by Dongfeng. This confirms the rumors about the Chinese group’s desire to permanently exit the Stellantis shareholder base, after the sale of 36.1 million shares in 2019 at a price of 16.65 euros for a total amount of around 600 million euros. Specifically, in accordance with the HoA, Dongfeng may from time to time make an offer to sell to Stellantis, all or part of the Stellantis common stock held by Dongfeng. Stellantis will have the right, but not the obligation, to accept this proposal and to purchase the Stellantis shares offered at the average closing price per share on Euronext Milan for the period of five trading days immediately preceding the date on which Dongfeng presents the ‘offer. In the event that Dongfeng decides to dispose of any part of its Stellantis common stock through an accelerated book build (ABB) process, Dongfeng will offer Stellantis the opportunity to intervene as principal investor in such transaction, at the resulting offer price. ABB. Any purchase of Stellantis common stock by Stellantis from Dongfeng will be made under the authority granted by the general meeting of April 13, 2022, possibly renewed or extended. Stellantis will notify the market of the possible acceptance of an offer by Dongfeng and the purchase of the shares offered.