YANGZHOU, Jiangsu – Yaxing Bus Co., Ltd., a Shanghai-listed subsidiary of Yaxing Automobile Group Corp. (Yaxing Group), said in a statement on March 4 that Yaxing Group signed an agreement a day earlier with an affiliate of Weichai Holding Group to transfer a 51 percent stake (112.2 million shares) it owns in Yaxing Bus at no cost.
The affiliate – Weichai (Yangzhou) Yaxing Automobile Co., Ltd. – is a new company established by Weichai Holding and its subsidiary companies, with financial backing from the Shandong Provincial State-Owned Asset Commission.
This officially signals the acquisition of Yaxing Bus by Weichai Holding, the controlling shareholder of Weichai Power, China’s largest independent diesel engine maker.
Last November, Yaxing Group said that it planned to transfer all or part of its 53.71 percent stake in Yaxing Bus to an affiliate of Weichai Holding (see CBU-HeavyDuty Vol. 1 No. 11).
The acquisition of Yaxing Bus, according to industry analysts, is the first step in Weichai Holding’s expansion into the Yangtze River Delta region, and fills a void in both bus manufacturing and new energy vehicles.
In November 2009, the municipal government of Yangzhou, where Yaxing Bus is based, signed a strategic cooperation agreement with Weichai Holding to make Yangzhou an automotive components and powertrain production base for Weichai Holding.
Weichai Holding has successfully tapped into the auto manufacturing industry via acquisitions in recent years. It has added Shaanxi Automobile (Shaanxi Heavy-Duty Truck) and Chongqing Chuanjiang Auto under its vehicle manufacturing assets. Yaxing was a leading large bus maker about a decade ago but has since struggled due to poor management and slow-response to the market. The company has looked for a potential acquirer since 2006.