It is reported that Huawei’s new car company is valued at as high as 250 billion yuan in equity negotiations, and Changan, FAW, Dongfeng, etc. are on the list-Mobile Finance Industry

It is reported that Huawei’s new car company is valued at as high as 250 billion yuan in equity negotiations, with Changan, FAW, Dongfeng, etc. on the list

IT Home

2023-11-29 15:35:15

On November 25, Changan Automobile and Huawei Technologies Co., Ltd. signed an “Investment Cooperation Memorandum”. After negotiation between the two parties, Huawei plans to establish a company engaged in the research and development, design, production, sales and service of automotive intelligent systems and component solutions (hereinafter referred to as the “target company”). Changan Automobile plans to invest in the target company and carry out strategic cooperation.

According to Reuters, three people familiar with the matter said that Huawei Technologies’ newly established smart car software and parts company will sell shares to investors including Changan Automobile, with a valuation of up to 250 billion yuan. ($34.67 billion).

Changan Automobile and its ultimate parent China Ordnance Equipment Group Co., Ltd., also known as China Southern Industries Group Co., Ltd., are considering acquiring about 35% and 5%, respectively, of the new company, two of the people said. The company’s bid may be between 200 billion and 250 billion yuan.

Three people familiar with the matter said potential minority shareholders include FAW Group and Dongfeng Motor Group, which are also in advanced talks with Huawei to acquire up to 5% of the shares each.

Two of the people familiar with the matter said that Huawei is likely to remain the largest single shareholder for at least the next two to three years, with a shareholding ratio of 40% to 50%.

Three people familiar with the matter said the details of the deal – especially the equity split and valuation – have not been finalized and are subject to change. The deal will also receive regulatory approval, one of the people and a fourth person familiar with the matter said.

IT Home noted from the report that these sources declined to be named, and Changan Automobile declined to comment further. Huawei and other related companies did not immediately respond to requests for comment.