FAW, Toyota and GAC signed a framework alliance moving FAW Toyota's half to GAC
Toyota's two Chinese joint-venture partners agreed to pool FAW Toyota and GAC Toyota across research, procurement, production and sales, with GAC buying FAW's 50 percent of FAW Toyota in shares.
Toyota Motor Corporation, China FAW Corporation and Guangzhou Automobile Group said on October 8 that they had signed a framework agreement in Guangzhou to combine their two Chinese joint ventures, FAW Toyota and GAC Toyota.
Under the agreement, GAC will acquire the 50 percent stake in FAW Toyota Motor held by FAW through a share issuance, which will make FAW a strategic shareholder in GAC. FAW Toyota will continue to operate as a separate entity. In a later phase, the two joint ventures will form an alliance covering research and development, procurement, production and sales. The three companies said the structure was intended to “accelerate the development of electrification and intelligence at both joint ventures.”
The agreement was signed by FAW president Liu Yigong, Toyota president Kenta Kon and GAC chairman Feng Xingya. Toyota’s partnership with FAW dates to 2002 and its joint venture with GAC to 2004; the release said products from the two ventures had been bought by more than 23 million customers in China.
Toyota’s release named no price, and the price does not yet exist. GAC’s own share-issuance plan, filed to cninfo, the disclosure service for the Shanghai and Shenzhen exchanges, on September 29, states that the valuation and the transaction price of the asset had not been determined, pending an appraisal to be filed with the state-asset supervisor. That document sets the issue price at 5.75 yuan per A share and reports FAW Toyota’s unaudited net profit at about 4.72 billion yuan for 2024 and about 4.23 billion yuan for 2025.
Neither Toyota nor GAC filed a disclosure on October 8 in the Tokyo, Hong Kong or mainland Chinese registers, each of which was checked.