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Evergrande buys major stake in parent of China's largest dealership group
Automotive News China | 2018/9/25

China Evergrande Group agreed to buy 41 percent of Xinjiang Guanghuai Industry Investment Group, parent of China¡¯s largest dealership group, China Grand Auto Services Co., as the Chinese real estate development giant keeps diversifying into the auto industry.

Under the deal signed last week, Evergrande will pay 14.5 billion yuan ($2.1 billion) for the major stake, Evergrande said.

The deal will make Evergrande China Grand¡¯s second-largest shareholder, next only to the dealership group¡¯s founder and chairman, Sun Guangxin.

Evergrande, based in the south China city of Guangzhou and listed in Hong Kong, is the second-largest property developer in China by revenue. It posted a net profit of 52 billion yuan on revenue of 304.2 billion yuan in the first half of the year.

In June, Evergrande¡¯s health care subsidiary, Evergrande Health Industry Group, acquired 45 percent of electric vehicle startup Faraday Future for 6.7 billion Hong Kong dollars (5.9 billion yuan).

Faraday Future was founded by Chinese entrepreneur Jia Yueting in Los Angeles. The Evergrande investment has provided Faraday Future with much-needed cash and will enable it to produce EVs in China.

Xinjiang Guanghuai Industry Investment, based in Urumqi of the northwest China¡¯s Xinjiang region, is a private business conglomerate. Aside from vehicle distribution, it also operates businesses in oil and gas exploration, coal mining, logistics and real estate development. 

China Grand, headquartered and listed in Shanghai, distributed some 881,200 new vehicles for a wide range of global and Chinese automotive brands in 2017, with revenue approaching 161 billion yuan.

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