FAW to become GAC’s No. 2 shareholder in China auto sector shake-up

Asset reorganization follows official calls to rein in excess capacity China's state-owned carmakers, whose ventures with foreign legacy marques were cash cows in the gasoline-car era, are now bleeding heavily. HONG KONG — Two major Chinese state-owned carmakers are weighing a resource consolidation amid Beijing's push to rein in overcapacity.Guangzhou Automobile (GAC) Group said Monday that it had reached a stake acquisition agreement with First Automotive Works (FAW) Group, paving the way for the latter to become its second-largest shareholder with "strategic influence".The deal is designed to "optimize" and "integrate" the industrial resources of the two state-owned automakers, GAC Group said in a filing with the Shanghai Stock Exchange.

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