Chinese car group's takeover of Rover hits snags

Agence France Presse | February 7, 2005

[HAL9000]

BEIJING: Shanghai Automotive Industry Corp's (SAIC) planned purchase of troubled British car firm MG Rover has run into difficulties with Chinese regulators stalling on a decision, the Financial Times reported.

It said state regulators are resisting British pressure to fast track approval, angered by Rover's decision to reveal it was in negotiations with SAIC, China's largest state-run automaker.

For the deal to proceed, SAIC needs approval from the Shanghai city government, its owner, and from the National Development and Reform Commission, which is responsible for foreign investments by state-owned companies.

However, Rover's decision to reveal it was in talks with SAIC and the resulting public debate over Rover's future has irked the regulators and contributed to a delay in approving the deal, the newspaper said.

With a British general election expected in May, the possibility of up to 6,000 job losses at Rover's Longbridge plant will alarm Tony Blair's Labour government, it said.

Rover has refused to comment on possible redundancies, claiming that everything was speculation until the Chinese government agreed the partnership with SAIC.

Chinese regulators and SAIC, which has joint ventures with Volkswagen and General Motors, could not be reached.

Under the proposed deal, SAIC would invest one billion pounds (1.85 billion dollars) in Rover, a tie-up that could potentially rescue the failing fortunes of the Birmingham-based factory and its workers.

However, even if the deal comes off, Rover's future is far from assured, with the group suffering with dated models, a poor brand image and falling sales.

[Route101]

A Chinese Rover???....L.O.L....will it run on steamed rice?

[Jimmy Valentine]

China takes over MG-Rover. The revenge of "Lucas" prince of darkness on the hapless Chinese.

Regards,