BMW Group pays $4.2 bln to acquire majority stake in Chinese joint Venture, BMW Brilliance Automotive (BBA).
It now holds 75% of the shares in BBA, while the Chinese partner Brilliance China Automotive holds 25%.
Last year, the BMW Brilliance Automotive (BBA) joint venture produced 700,000 vehicles.
BMW expects sales in China to grow into 2022, after seeing 9% growth in BMW and Mini deliveries last year.
The German carmaker said it now indirectly holds 75% of the shares in BBA, while the Chinese partner Brilliance China Automotive Holdings Ltd. indirectly holds the remaining 25%.
BMW said its increase in stake in the venture with Brilliance Auto Group from 50% to 75% as well as the amended Joint Venture Contract are effective from 11 February 2022.
As of this date, BBA will be fully consolidated in the group financial statements of BMW AG. The payment of the purchase price of 3.7 billion euros ($4.2 billion) is expected to be completed by 22 February 2022.
BMW said that the revaluation of the existing 50% stake in BBA as of 11 February 2022 leads to a positive one-off effect in the financial result of the Automotive segment of 7-8 billion euros ($8-9 billion).
The automaker expects sales in China to grow into 2022, after seeing 9% growth in BMW and Mini deliveries last year to 846,237 vehicles. Last year, the BMW Brilliance Automotive joint venture produced 700,000 vehicles.
“Our extended joint venture contract lays the foundation for further mutual growth and progressive development … It paves the way for balanced development in the three main regions of the world,” Chief Financial Officer Nicolas Peter said.
BMW follows the Volkswagen Group, which took majority control of its electric vehicle production joint venture JAC Volkswagen in 2020.
Mercedes-Benz, which owns 49% of its joint venture in China, Beijing Benz Automotive, faced opposition from its Chinese partner BAIC, after seeking to raise its stake.