Brown: Chinese carmaker planning Rover takeover

Chinese car giant Shanghai Automotive is preparing to submit plans to acquire ailing Rover in the next few days, British Chancellor of the Exchequer Gordon Brown has said.

The Chancellor was wrapping up a visit highlighting Britain’s eagerness to boost trade and other cooperation with China.

He visited a B&Q store in Shanghai’s new financial district before leaving for the southern boomtown of Shenzhen.

Yesterday, the Chancellor said Shanghai Automotive – also known as SAIC - planned to present a joint venture feasibility study with MG Rover Group in the next few days.

The Shanghai carmaker, which has major joint ventures with General Motors and Volkswagen, reportedly plans to invest up to £1bn (€1.4bn) in a 70% stake in Rover.

SAIC has refused to comment on the deal.

The acquisition requires approval from the Shanghai city government, SAIC’s controlling shareholder, and the National Development and Reform Commission – a Cabinet-level agency in charge of economic policy.

SAIC signed a co-operation agreement with Rover in June.

Brown told journalists that Chinese officials he met in Beijing were enthusiastic about the planned acquisition.

The British government, keen to avoid more job losses ahead of the upcoming General Election, is hoping the deal will help preserve employment for 6,000 Rover workers. Brown said he had not seen SAIC’s study, and did not know if it entailed any redundancies.

“I think both the government of China and the British government welcome the idea of this proposed alliance,” he said, refusing to comment further.

“Rover is a private company, and these are commercial negotiations, and it’s not for this government to comment on them at a sensitive time.”