Guangzhou Automobile Group (GAC), in a Shanghai Stock Exchange filing on September 14, announced an intent agreement with China First Automobile Group (FAW) to issue shares and raise matching funds to acquire part of FAW's equity in a vehicle joint venture.
The deal aims to optimize resources between local and central state-owned enterprises, making FAW GAC's second-largest shareholder and giving it strategic influence.
The filing said it is expected to constitute a major asset restructuring but will not change GAC's actual controller or amount to a backdoor listing.
GAC's A-shares have been suspended from trading. The suspension is expected to last no more than 10 trading days as the transaction remains in the planning stage.
The announcement came after media reports that the pairing – under discussion for nearly two years – was being revived under policy guidance as both automakers face mounting pressure.
GAC posted a net loss of 8.78 billion yuan (US$1.3 billion) in 2025 as sales fell 14 percent to 1.72 million vehicles.
FAW's first-half sales dropped 15.33 percent to 1.52 million units, with its slow EV transition drawing blunt criticism in a Changchun municipal planning document.
The National Development and Reform Commission said on September 11 that it would support mergers among large auto groups to integrate resources and avoid homogeneous competition.
Editor: Yao Minji
In Case You Missed It...
Sep 15, 2026
