Automotive Author:Chao Gong Jul 20, 2020 02:38 PM (GMT+8)

Shanghai's state-owned car carmakers SAIC have announced that they have decided to forgo the acquisition of the car rental service provider, CAR. It is reported that Beijing equivalent BAIC will, therefore, reconsider its previous takeover bid.

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SAIC have decided to terminate the acquisition of the Chinese leading car rental service provider, CAR Inc. since the two parties have failed to reach an agreement on conditions within the scheduled time. After the announcement, BAIC expressed the intention to restart their previous plan, acquiring 21.26% of shareholdings of the company, according to people familiar with this matter. 

Since this past April, when Luckin Coffee was involved in its fraud scandal, CAR – which is also owned by Lu Zhengyao, the Chairman of Luckin – has been reported to be actively seeking potential buyers. On June 2, BAIC was said to be set to acquire 21.26% of shareholdings to become the largest stakeholder of the company. But the deal didn't go ahead for some reason. A month later, on July 2, the company signed a takeover offer with SAIC instead, declaring that the latter would acquire over 613 million shares of the former at HKD 3.1 per share – which was higher than BAIC's offer.

Now that SAIC is also walking away from the deal, BAIC has a chance to renegotiate with CAR. The company's ultimate buyer and the final deal size remain to be seen.