Baker McKenzie recently acted for Volkswagen Group ("Volkswagen" or "the Company") as regulatory compliance counsel in relation to two major investments in China's electric vehicle ("EV") market.
Volkswagen is poised to take a 50% stake in the state-owned Anhui Jianghuai Automobile Group Holdings Limited – the parent company of Anhui Jianghuai Automobile Group Corp., Ltd. ("JAC Motors") – and increase its holding in the JAC-Volkswagen joint venture from 50% to 75% for around EUR 1 billion, according to news reports. The transaction is said to be the biggest M&A deal in the China EV sector, and is part of the State Council's reform of establishing mixed-ownership systems and an important achievement of Anhui Province's involvement in the "Belt & Road" Initiative.
Elsewhere, Volkswagen will also invest EUR 1.1 billion to acquire a 26% stake in Shenzhen-listed lithium-ion battery manufacturer Guoxuan High-Tech Co., Ltd., and become the biggest shareholder of the EV battery maker. The agreement is also set to make Volkswagen the first global automaker to buy directly into a domestic Chinese battery supplier.
Baker McKenzie's Shanghai-based Partner Simon Hui was the lead partner on both transactions. Partner Maggie Chen of Baker McKenzie FenXun (FTZ) Joint Operation in Shanghai also assisted on the Guoxuan High-Tech deal. They were supported by a team of lawyers from Chinese law firm FenXun Partners, which includes: Jeffrey Liu (Counsel), Leo Zhang (Counsel), Zhengwei Yang (Counsel), Emma Chen (Associate), Hailin Cui (Associate) and Serene Shen (Legal Assistant).
"It has been a privilege to act for our long-standing client Volkswagen on these significant deals and to continue to play a role in its growth story," said Simon Hui, who also heads the Firm's Dispute Resolution Group in Shanghai. "Drawing on our global experience and local insights, we could not have been more pleased to have the opportunity to help develop an effective compliance management program that meet commercial and regulatory requirements. We look forward to continue working hand-in-hand with our client and supporting them with all their future legal needs."