FAW Group, Brilliance Auto in merger talks

By Shi Jierui

FAW Group and Brilliance Auto are in merger talks, with FAW expected to buy controlling shares in Brilliance, according to the 21st Century Business Herald, citing sources familiar with the deal.

Though a planning executive of FAW Group said, "This matter has not taken shape yet", he didn't deny the news of merger talks.

Brilliance Chairman Qi Yumin has said he would not oppose a takeover deal if it could help the brand develop its own vehicles. Brilliance has the capability of producing 800,000 units per year, but a person familiar with the matter was quoted as saying, "Brilliance is short of money". With a merger, new products could be developed and projects could be started.

Eight years ago, FAW Group sold its controlling stake in Jinbei Auto to Brilliance Auto, and now the Chinese auto giant plans to buy it back.

However, it doesn't appear to be easy for FAW to complete the merger talks. Guangzhou Auto is also interested in merger talks and restructuring with Brilliance. An administrator with Guangzhou Auto said, "According to our analysis, they (Brilliance) hope to be able to cooperate with Guangzhou Auto."