China Automotive Systems announces pending acquisition of Henglong Automotive Parts Company

Jan. 1, 2020
China Automotive Systems, Inc. (CAS) has entered negotiations with the Hubei Wanlong Investment Co. to acquire an additional 36.5 percent of Henlong Automotive Parts Company. If both parties agree to the transaction, CAS will own 81 percent of Henlon

China Automotive Systems, Inc. (CAS) has entered negotiations with the Hubei Wanlong Investment Co. to acquire an additional 36.5 percent of Henlong Automotive Parts Company. If both parties agree to the transaction, CAS will own 81 percent of Henlong, which manufactures power steering systems and components for China's passenger vehicle market.

Henglong is currently 44.5 percent owned by China Automotive Systems. The company's main customers include Chery Auto, BYD Auto, Geely Auto and FAW Volkswagen. In 2006, Henglong posted sales of USD$54.54 million, representing 57 percent of China Automotive Systems' total net sales, and net profit of USD$9.75 million, while CAS' net profit was USD$4.81 million.

"We are very pleased to take this step to consolidate our fastest-growing subsidiary to enhance value for our shareholders," says Jie Li, the company's chief financial officer. "A special acquisition committee continues its discussion with Henglong's minority shareholder as we are working to roll this key minority stake into our public company. This step further demonstrates our commitment to be a power steering leader and participate in the rapid growth of the passenger vehicle market in China."

The special acquisition committee, consisting of three China Automotive Systems' independent directors, has been formed to evaluate and facilitate the final transaction. The special acquisition committee is evaluating appraisal firms and financial advisers to assist it. Management expects the acquisition may be completed in the first quarter of 2008.

For more information about China Automotive Systems, Inc., visit the company's Web site.

Sponsored Recommendations

Best Body Shop and the 360-Degree-Concept

Spanesi ‘360-Degree-Concept’ Enables Kansas Body Shop to Complete High-Quality Repairs

How Fender Bender Operator of the Year, Morrow Collision Center, Achieves Their Spot-On Measurements

Learn how Fender Bender Operator of the Year, Morrison Collision Center, equipped their new collision facility with “sleek and modern” equipment and tools from Spanesi Americas...

ADAS Applications: What They Are & What They Do

Learn how ADAS utilizes sensors such as radar, sonar, lidar and cameras to perceive the world around the vehicle, and either provide critical information to the driver or take...

Banking on Bigger Profits with a Heavy-Duty Truck Paint Booth

The addition of a heavy-duty paint booth for oversized trucks & vehicles can open the door to new or expanded service opportunities.