SAIC will list 50 billion yuan globally next year to integrate Shanghai GM Shanghai Volkswagen

SAIC Motor is currently in the process of preparing for an overseas listing, engaging with major investment banks and making detailed arrangements for its IPO underwriting. Rumors about the group's overall listing plan had been intense earlier but have since quieted down. Hu Maoyuan, president of SAIC Motor, previously outlined three possible strategies for the listing but has remained silent on specifics. The question of when, where, and how SAIC Group—among China’s top auto industry players—will go public remains a hot topic. According to insiders, the overall listing project is now in a critical phase. Although some details are still being finalized, the general plan is set: SAIC Group aims to conduct dual listings in Hong Kong and New York next year, raising approximately 50 billion yuan (about 6 billion USD), with 2 billion USD raised in Hong Kong. BOC International, Deutsche Bank, Merrill Lynch, and Morgan Stanley have been selected as underwriters. Despite these developments, SAIC’s spokesperson, Xue Hao, declined to comment on key issues, stating “not clear.” This silence has only heightened market speculation. Since April, the company has been hinting at the possibility of an overall listing within two years, with three options considered: introducing strategic investors, direct overseas listing, or using existing A-share listed companies to restructure and achieve full listing. The group's recent financial demands are significant, with over 50 billion yuan in investments expected. SAIC has made several major acquisitions and partnerships, including a stake in Daewoo and integration of Isuzu Motors in China. Additionally, the acquisition of Ssangyong Motor in South Korea and collaboration with British Rover require substantial funding. These moves underline the need for an overseas financing platform. While the group's expansion is low-key, it has drawn considerable attention. Partners like General Motors and Volkswagen have announced new investments in China, requiring SAIC to maintain control through large capital outlays. The acquisition of Ssangyong, expected to cost around 500 million USD, will also boost production capacity significantly. Analysts note that the overseas listing may face challenges, particularly regarding the inclusion of joint venture assets. Conflicts of interest and regulatory hurdles could impact the listing's progress. However, the integration of parts suppliers and other non-core assets may be smoother. For Shanghai Automotive (600104.SH), the parent company's overseas listing could have long-term implications. While the immediate impact on its performance might be limited, the injection of high-quality assets into the overseas entity could reduce the potential for future growth. Analysts suggest that Shanghai Auto may see gradual changes over the next couple of years. As one of the largest blue-chip stocks in the auto sector, Shanghai Auto has been heavily held by funds. Despite recent price declines, many remain optimistic about its long-term value. With the upcoming listing, fund managers are closely watching the situation, adjusting their strategies accordingly. Overall, the SAIC Group's overseas listing is set to be a major event in the global capital market, with far-reaching consequences for both the group and its subsidiaries.

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