JSW Group is set to become the single-largest shareholder in JSW MG Motor after acquiring a further 10% stake from Chinese partner SAIC Motor, Reuters reported citing unnamed sources.
Under the proposed transaction, SAIC’s holding in the Indian electric vehicle (EV) joint venture would fall from 49% to 39%, while JSW’s stake would climb to 45%.
According to the report, JSW expects the deal to close within a month, with SAIC having already agreed to the terms.
The financial value of the transaction was not disclosed.
Just Auto has contacted JSW Group for details on the report.
The deal would also grant JSW greater operational control and oversight of the business, according to a second source cited in the report.
As part of the arrangement, SAIC would reinvest approximately Rs6bn ($63m) of the sale proceeds back into JSW MG Motor to support the launch of new models without altering its remaining shareholding.
SAIC entered the Indian market in 2019 with plans to invest more than $650m, a target it has been unable to meet.
India’s introduction of investment restrictions on Chinese companies in 2020 has limited SAIC’s ability to bring in equity and expand its operations, with those curbs continuing to apply to carmakers despite a broader easing of India-China commercial ties.
Discussions over a stake transfer began last year, though a disagreement on valuation had initially stalled progress.
JSW MG Motor has outlined plans to invest up to $418m in new model launches and to more than double its annual production capacity to 300,000 units.
The company’s sales have grown, driven in large part by the Windsor EV, though losses have widened as competition in the segment has intensified.
When JSW Group acquired its initial 35% stake two years ago, the unlisted venture carried a valuation of $1.2bn.
“China’s SAIC to sell 10% more equity in JSW MG Motor – report” was originally created and published by Just Auto, a GlobalData owned brand.
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