The main owner of the Chinese BMW-Partners Brilliance China According to sources, Automotive is considering selling shares in the joint venture with the German car manufacturer. Preliminary discussions had taken place with local car manufacturers, including VW partner FAW, the Bloomberg news agency reported on Monday, citing people familiar with the matter. Discussions are continuing, but it is uncertain whether a deal will be concluded, it said. BMW has held three quarters of the shares in the car manufacturing joint venture BBA since it took over the majority almost two years ago, the rest belongs to its partner Brilliance.
Brilliance China’s parent company, Brilliance Auto Group Holdings, which is listed on the Hong Kong stock exchange, has been under financial pressure for several years. In 2020, the company was unable to repay debts. Supervisors had also fined the company for incorrect accounting. Last year, the local government of the Chinese megacity Shenyang stepped in to take over Brilliance China’s liabilities and around 30 percent of the company’s shares in a restructuring.
The joint venture with BMW is Brilliance China’s most valuable asset, accounting for almost all of the company’s net profit.
BMW: 3.7 billion euros for additional shares
In Shenyang, the joint venture BBA produces BMW cars from seven model series in several plants; the annual production capacity is 830,000 cars. Around 26,000 people work at BBA. Shenyang authorities denied knowledge of any plan to sell shares. Spokesmen for Brilliance China and FAW did not initially comment, BMW did not want to comment on the information.
In 2022, BMW increased its stake in the joint venture with the Chinese to 75 percent from the previous 50 percent and paid 3.7 billion euros for it. The Munich car maker’s 2022 annual report states that the joint venture’s contract, which previously ended in 2028, has been extended until 2040. And the strategic goal of the BMW Group is to further strengthen long-term cooperation with a partner in China with the acquisition.