IDG Capital is considering acquiring a stake in Chery Automobile s parent company for 97.6 billion

Mondo Finance Updated on 2024-01-29

According to Bloomberg, IDG Capital is considering spending up to 7 billion yuan (about 9$7.6 billion) to buy a stake in Chery Holding Group from existing shareholders, which could give IDG Capital exposure to one of China's few major unlisted automakers, people familiar with the matter said.

Beijing-based IDG Capital is raising funds from investors for the potential deal, according to people familiar with the matter, who spoke on condition of anonymity due to confidentiality concerns.

It is reported that Chery Group is considering simplifying the shareholding structure in order to restart the listing plan of its subsidiary Chery Automobile in China. As part of the restructuring, Chery Group's shareholders have the option to exchange their shares for shares in Chery Automobile. Chery Automobile is currently considering applying for an initial public offering (IPO) as early as next year and may seek a valuation of up to 150 billion yuan.

Discussions between IDG Capital and Chery Holdings may not lead to any deals, and the details of Chery Auto's potential IPO are also subject to change, according to people familiar with the matter. So far, representatives from Chery Automobile and IDG Capital have not responded to requests for comment.

Chery Automobile.

Chery Automobile is one of the few automakers in China that has not yet gone public, and it is also the most important asset of the Chery Group. In addition to this, the group also has other businesses in the financial services and real estate sectors. As early as a meeting in 2009, Yin Tongyue, chairman of Chery Automobile, proposed a plan to go public.

Founded in 1997, the company sells cars in China and overseas markets through brands such as Chery, Tiggo and Arrizo, with R&D centers in China, Germany, the United States and Brazil, according to Chery's official website. In the first 11 months of the year, the company has sold nearly 1.7 million vehicles, according to Xinhua.

Chery Automobile, which is also one of China's largest exporters of automobiles, plans to open subsidiaries in the United Kingdom, Germany and France to sell cars directly to local customers. In addition, the company announced plans to build factories in Indonesia, Malaysia and Thailand.

Currently, the company is investing $400 million to build a plant in Argentina, with the goal of producing 100,000 vehicles a year in Argentina by 2030. In Vietnam, the company plans to start the first phase of production at a plant with a total investment of US$800 million by the end of 2025.

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