Beijing (ZXZC)- On May 30th, China's light truck arm Dongfeng Automobile Company (DFAC) announced that its controlling shareholder has been changed from Dongfeng Motor Company Limited (DFL) to Dongfeng Motor Group (DFMG).

DFL, the joint venture between DFMG and Nissan Motor, signed a share transfer agreement with DFMG to transfer all of its 598,000,000 shares to the latter (accounting for 29.90% of DFAC’s total issued shares). 

Photo credit: DFAC

Upon completion of the transaction, DFMG will also issue a partial tender offer to all shareholders of DFAC excluding itself for 502,000,000 shares (accounting for 25.10% of DFAC’s total issued shares), as a mean to gain control right of DFAC. After the transactions settle, DFAC will be a majority-owned subsidiary of DFMG.  

Commercial vehicle has been a preponderance business sector of Dongfeng Motor Corporation (DFMC). The stock right transfer signifies DFMC’s determination in making its commercial vehicle sector a self-sufficient independent business, adhering to China’s encouraged reformation of state-owned enterprises.  

As the company responsible for DFM’s light truck business, DFAC designs, manufactures, and sells complete light trucks as well as powertrains. The equity adjustment will allow DFL to focus on its passenger vehicle business while DFAC falls directly under the management of DFMG, further perfecting the auto giants’ business blueprint. The adjustment will also be a boost to DFMC to realize its 14th five-year goal to sell over 1 million commercial vehicles.