Youngman Automobile OK'd for Viseon deal

China's privately owned automaker Youngman Automobile Group Co has obtained provincial government approval to buy a major stake in Germany's Viseon Bus GmbH, in the Chinese company's latest attempt to acquire an European automaker after its failed bid for Saab.

According to a statement on the Zhejiang Provincial Development and Reform Commission's website, the local government has allowed Youngman to invest 10 million euros ($12.30 million) in Viseon, a German maker of city buses, coaches and airport shuttle buses.

The Jinhua-based car and bus maker will use 1 million euros to buy a 74.9 percent stake from Viseon's two shareholders, JR Bus Consult & Production GmbH, which owns a 61 percent stake, and BartConsult Kereskedelmi, which owns 39 percent of the German automaker.

Once the acquisition is completed, Youngman will provide an additional 1 million euros to the original shareholders and will invest another 3 million euros in Viseon, as well as provide a 5 million euro loan to support the company.

The statement said that the company will finance the acquisition with its working capital.

A spokesman for Youngman couldn't be reached on Tuesday.

Analysts said that the deal is very "reasonable" for Youngman, compared with its previous bid for Sweden's Saab AB.

However, "Youngman should pay attention to the relationship between shareholders and think carefully before it takes out its wallet, based on its experience from the Saab bid", said an analyst who declined to be named.

Viseon reported a net loss of 2.26 million euros in 2011, with total sales revenue of 31.07 million euros. As of Dec 31, Viseon had a net assets deficit of 3.83 million euros.

"The investment in Viseon consolidates our premium position within the Chinese bus manufacturers segment," Pang Qingnian, founder and president of Youngman, said after the two sides reached an initial agreement in May.

Youngman, the largest bus maker in China, has obtained licenses from German commercial vehicle brand Neoplan to produce Neoplan buses and coaches for the Asian market since 1994. It has an about 80 percent market share of China's bus segment, with more than 4,800 buses sold in 2011.

Viseon also makes Neoplan-branded vehicles after it took over the bus factory in Pilsting, Germany, in 2009, which was started by Neoplan more than 30 years ago.

In October, Youngman's subsidiary Zhejiang Youngman Lotus Automobile Co Ltd and Pang Da Automobile Trade Co agreed to launch a joint $140 million takeover of Saab and its UK dealer network, which would have given Youngman a 60 percent stake in the Swedish company and Pang Da the remaining stock.

However, the bid was stopped by General Motors Co, which had preferential shares in the Swedish company and technology ties with Saab. GM was worried that Saab's technology would greatly boost the Chinese automaker's competitiveness in its largest market.

lifangfang@chinadaily.com.cn