Shanghai (ZXZC)- The report that Shenzhen Baoneng Investment Group (Baoneng Group) will acquire stake in Chery Auto was untrue, according to a statement Chery Auto released on May 16.

Meanwhile, the company also pointed out that the deal of Chery Auto, as a stated-owned company, must undergo relevant auction process through open market and be approved by the government if it wants to sell equities.

Some media reported on May 15 that Baoneng Group was planning to invest RMB 25 billion to RMB 27 billion to buy stake in Chery Auto and become its biggest shareholder.

The two companies previously had business connections. In December 2017, Baoneng Group purchased 51% stake in Qoros Auto for RMB 6.5 billion. Initially known as Chery Quantum Auto, Qoros Auto was established in 2007 as a joint venture between Chery Auto and QUANTUM(2007)LLC.

After Qoros Auto introduced Baoneng Group as new strategic investor, the automaker achieved a splendid year-on-year sales growth of 288% to with a total of 11,371 vehicles delivered in the first quarter this year, also completed 74% of the annual sales in 2017. On the contrary, Qoros Auto had been suffering continuous sales and profit losses before Baoneng Group’s capital injected.

Interestingly, this was the second denial of auto merger or acquisition rumor that happened in this week. On May 14, some reports said that Geely Auto and BAIC Group had been under a merger discussion. On the next day, two companies jointly issued a statement denying the merger talk between them and saying such report was groundless and untrue.