SAIC tries to buy Rover on the cheap

The Observer reports on the price Shanghai Automotive Industry Corporation is prepared to pay for ailing British car maker Rover. The deal sounds a bit like a Silk Alley bargaining session, with the price dropping and dropping every time anyone talks about it. Here is the meat of the deal:

Chinese carmaker Shanghai Automotive Industry Corporation is committing itself to pay only a further £130m to seal its proposed deal with MG Rover, according to sources close to negotiations. This is a fraction of the £1 billion that had been expected.

There has already been a £67m down payment, made last autumn, secured against the engine technology and intellectual property on the Rover 25...

...In the autumn MG Rover chairman John Towers said: 'There's a medium car, a small car, a large car and a sports car platform there as well.' Reports suggested that a joint-venture agreement - to be 70 per cent Chinese-owned and 30 per cent Rover - envisaged the investment of £1bn to £1.5bn in the new vehicles...

...The 70/30 JV will be a revenue-sharing agreement. There will be subsidiary joint ventures: one in China, involving SAIC and a third partner Nanjing Automotive, apportioning shares 80/20 between the two, and one in the UK, in which MG Rover and the Chinese will have a stakes.

Observer report

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