Chinese Plan to Buy Stake in GM
byon 11-14-2010 at 07:09 PM (252 Views)
Auto Maker, Other Overseas Purchasers Seen Taking 16% of American Icon's New Share Offering
NEW YORK—In a sign of the changing fortunes of the world's top two economies, China's biggest auto maker, SAIC Motor Corp., is negotiating to acquire a stake of about 1% in General Motors Co. worth about $500 million, according to a person familiar with the matter.
The U.S. auto maker also is prepared to sell more than $1 billion worth of shares to sovereign wealth funds in the Middle East and Asia. Combined, the sales would give foreign investors roughly 16% of the shares to be sold next week under an initial public offering of stock, and give them a stake of some 4% in the Detroit auto maker. GM declined to comment on the investment talks.
The issue of overseas investors buying GM shares in the company's IPO has been a sensitive one for the U.S. government, which plans to reduce its 61% stake in the auto maker to about 35% through the IPO."