BEIJING - China's largest automaker SAIC Motor Corp said that it acquired an 0.97 percent stake in General Motors for almost $500 million through the US company's IPO on Thursday.
As a result of the purchase, traded by SAIC's wholly owned SAIC Motor Hong Kong Investment Ltd, the Shanghai-based automobile group acquired 15,151,515 common shares of GM at $33 each.
SAIC Motor Corp's shares rose 4.9 percent to 18 yuan ($2.71) on the Shanghai Stock Exchange on Thursday, making it the day's best-performing automaker.
GM's stock offer is worth potentially $23 billion, surpassing the $22.1 billion sold by Agricultural Bank of China Ltd this year in the largest IPO of common stock in history.
The IPO ends the US government's role as a majority shareholder after GM entered bankruptcy protection in June 2009.
SAIC said in an e-mailed statement to China Daily that the investment in GM "is based on a long-term strong and stable strategic partnership as well as confidence in GM's promising future".
Moreover, the reinforcement of the partnership will help SAIC improve its research and development capability and expand its overseas market, said the statement.
"We are happy with SAIC's decision to participate in GM's public offering," said Tim Lee, president of GM International Operations. "GM has enjoyed a strong partnership with SAIC over the past 14 years. Our 10 joint ventures with SAIC include some of China's most successful automotive operations. SAIC's participation in GM's public offering represents another milestone in our partnership."
Zhong Shi, an automobile analyst based in Beijing, said that the stake purchase will be a win-win situation for both sides.
SAIC and GM began cooperation in 1997, when the two automakers formed Shanghai GM and the Pan Asia Technical Automotive Center (PATAC) engineering and design joint venture.
Last year, the two sides formed a new 50-50 investment company General Motors SAIC Investment Ltd, in Hong Kong to facilitate their expansion efforts in Asia outside China.
They plan to leverage their resources to support expansion in emerging markets, beginning with India.
In August, SAIC and GM announced that they will jointly develop a new small-displacement gasoline engine family and advanced transmission, which will be used by GM and SAIC in China and in future vehicles worldwide. This is the first time that a Chinese automaker has shared the intellectual property rights of core technologies with a foreign partner.
Earlier this month, the two companies boosted their cooperation in the development of new energy vehicles, by increasing the role of PATAC, to work on future vehicles and powertrains.
In the first 10 months of this year, GM, the largest foreign automaker in China, became the first global automaker to sell 2 million vehicles in China in a single year.