Following a joint auto-drive investment with Ford , Volkswagen has again instructed Freshfields, this time on an existing and further investment into Chinese state-owned car manufacturer Anhui Jianghuai Automobile Group (AJAG), also enlisting Baker McKenzie on the deal.
The venture marks China’s largest mergers and acquisitions electric vehicle deal to date.
Under the terms of the landmark deal with Shanghai Stock Exchange-listed AJAG, Volkswagen will acquire new 50% interest in the company. It will also increase its holding in an existing joint venture with AJAG from 2017, from 50% to 75%, for a consideration price of approximately EUR 1 billion.
For China, the transaction forms part of the Chinese state council’s reform of establishing mixed-ownership systems, as well as demonstrating Anhui Province’s commitment to China’s Belt & Road Initiative, the Chinese government’s global development strategy aimed at investment and infrastructure development in an almost 70 countries and international organisations.
Volkswagen again instructed lawyers from Baker McKenzie to advise on another EUR 1.1 billion acquisition, for a 26% stake in Shenzhen Stock Exchange-listed power lithium battery specialist, Guoxuan High-tech Co, this month. The deal will make Volkswagen the largest shareholder in the company and the first global car manufacturer to buy directly into a domestic Chinese battery supplier.
In addition, Volkswagen has made advancements into San Jose, California electronics manufacturer, QuantumScape Corporation, via an investment of up to USD 200 million, to increase its existing shareholding in the US battery specialist. “The goal is to drive forward the joint development of solid-state battery technology,” Volkswagen said in a press release on Tuesday.
These investments demonstrate a clear commitment to clean energy for Volkswagen, somewhat salvaging itself after a involving a multi-billion dollar claim made against it by German investors, related to the car manufacturer’s involvement in the software-manipulation of car exhausts, used to deceive United States emissions tests.
Familiar to the Magic Circle, it follows that Volkswagen instructed Clifford Chance last month, on a USD 4 billion, a common theme among car manufacturers in the last few months, as Covid-19 made sluggish the export of Chinese parts and manufacturing.
