Volkswagen Group China is selling a slice of Gotion High-tech to the government that built the battery maker’s home base. The company disclosed that Hefei’s state asset supervision commission has approved the transfer of 96,180,444 unrestricted shares to Hefei Construction Investment, at RMB 24.09 each, for a total of about RMB 2.317 billion.
After the transfer, Volkswagen China’s stake falls from 24.28 per cent to 18.98 per cent. It remains the largest single shareholder. Hefei Construction Investment takes 5.30 per cent and becomes the only other holder above the 5 per cent disclosure line.
Why the price looks like that
The RMB 24.09 figure is 90 per cent of Gotion’s closing price on the trading day before the agreement was signed. Against the RMB 25.08 close on 5 November, the transfer price sits about 4 per cent below the market.
The buyer has committed not to reduce or entrust the shares for twelve months after registration, and not to send a director or senior manager to the board. The filing states that the deal does not trigger a mandatory offer, is not a related party transaction and does not change control. Gotion remains controlled by Gotion Group and chairman Li Zhen.
The stated rationale is standard: the buyer believes in the company’s prospects and long term value, and the seller is reducing a position for its own business needs. Hefei Construction Investment is wholly owned by Hefei Construction Investment Holding Group and is funding the purchase from its own or self-raised capital.
The other announcement matters more
On 28 September, Gotion’s board approved three joint ventures with PowerCo, Volkswagen’s battery subsidiary: a 29.1 GWh plant in Valencia, Spain, an 8.4 GWh plant in Surany, Slovakia, and a 100,000 tonne per year lithium iron phosphate cathode plant in Kenitra, Morocco. Total investment is about EUR 3.222 billion, with Gotion contributing roughly EUR 1.598 billion and PowerCo about EUR 1.624 billion.
Gotion’s own disclosure describes the arrangement as a two-way equity and cross-layout binding. That is the accurate description. On the equity line Volkswagen is reducing. On the capacity line it is deepening. The two lines are not in conflict.
What a city gets for RMB 2.3 billion
The transfer still needs compliance confirmation from the Shenzhen Stock Exchange and registration with China Securities Depository and Clearing’s Shenzhen branch, so the closing date is not fixed.
The more interesting signal is who is buying. A municipal financing vehicle is taking equity risk in a battery maker at a 10 per cent discount, with a one year lock-up and no governance rights, one month after the same company committed EUR 1.6 billion of its own money to three plants on two continents. Hefei has spent a decade acting as the patient balance sheet under China’s battery build-out, and this is the same trade at a smaller size.
For Volkswagen, the equity exit is small against the volume commitment. For Hefei, the shares are a way to keep a strategic supplier anchored. Neither side is buying cells with this transaction. The cells were already contracted.
Editor’s note: This is an adapted translation of the original Gasgoo report. It has been trimmed and restructured for readability for an international business audience. The full original (in Chinese) is at https://auto.gasgoo.com/news/202611/9I70477361C501.shtml.