GAC plans share issue to acquire FAW's 50% stake in Toyota JV

GAC’s A-shares came back onto the Shanghai board on Tuesday, September 29, 2026. The halt that had kept them dark since September 14 lifted at the open, and by the close the stock had climbed 10 percent to 5.60 yuan. The trading days of silence ended in a single session.

On Monday, September 28, GAC had named the target. Its preliminary restructuring plan identified FAW Toyota as the asset to be acquired and set out the payment: new A-shares issued to FAW Group at 5.75 yuan, or 86 U.S. cents, per share. The consideration covered FAW’s 50 percent stake in the joint venture. Once the shares changed hands, FAW would become GAC’s second-largest shareholder. The ultimate controller would stay the Guangzhou State-owned Assets Supervision and Administration Commission; that line of control would not move.

The issue price stood at 5.75 yuan. The final consideration and the exact number of shares still depended on unfinished audit and valuation work, and on a supplemental agreement the parties had yet to sign.

GAC posted a net loss attributable to shareholders in 2025. Industry price competition, declining earnings from its joint ventures, and spending on its transformation had driven the result. The manufacturer, headquartered in Guangzhou, Guangdong, produced vehicles under its own brands and through foreign joint ventures. It entered the new year as one of China’s larger state-owned automakers, carrying that loss through the world’s largest vehicle market.

In September 2026 China released its 15th five-year plan for the intelligent connected new-energy vehicle industry. The plan called for mergers, acquisitions, and cross-regional consolidation among automakers.

FAW Toyota had been established in 2000 in Tianjin as a 50:50 joint venture between FAW Group and Toyota. Toyota held its half through Toyota Motor and Toyota Motor (China) Investment. The company operated production bases and engine plants in Tianjin, Changchun, and Chengdu, turning out gasoline, hybrid, and battery-electric vehicles.

Unaudited net profit after tax ran to 4.71 billion yuan in 2024, 4.23 billion yuan in 2025, and 1.01 billion yuan in the first half of 2026. Revenue climbed to 108.62 billion yuan in 2025 from 106.57 billion yuan the year before; first-half 2026 revenue stood at 40.73 billion yuan. As of June 30, 2026, total assets were roughly 43.06 billion yuan and net assets roughly 29.66 billion yuan.

FAW Toyota and GAC Toyota together sold about 1.58 million vehicles in 2025. That was 17.03 percent of China’s joint-venture passenger-vehicle sales that year.

Jefferies analysts wrote in a note: “The restructuring could deliver a tangible earnings stream through FAW Toyota and establishing a broader central-local state-owned enterprises alliance rather than a one-off asset transfer.”

FAW and Guangzhou Automobile Industry Group signed a strategic cooperation framework agreement on Tuesday, September 29, 2026. The signing followed the stake announcement. FAW said the parties would expand cooperation and seek a new model of interaction between China’s central and local state-owned automakers. The aim was to improve quality and operational efficiency amid consolidation in the world’s largest automotive market.

The China Association of Automobile Manufacturers publicly called on FAW and GAC to jointly develop technology and share resources. In the association’s view, that work should strengthen competitiveness and the resilience of supply chains. It urged policy support for consolidation.

Nomura analysts wrote in a note: “After years of fierce competition in China's auto market, we are finally seeing a potential trend of cooperation and resource sharing in the market, which we consider a good signal as it may improve the entire market's operating efficiency while creating win-win opportunities for all participants.”

The preliminary restructuring plan carried one further capital step. GAC also planned a second, non-public issue of A-shares to no more than 35 independent third-party investors. The money they paid in would serve as supporting funds—covering projects at FAW Toyota, working capital, debt repayment, and the expenses of the transaction itself.

The raise carried a hard ceiling, capped at 100 percent of the acquisition price. Because that price waited on unfinished audit and valuation work, the yuan total for the supporting issue remained open. The two figures moved together. Completion of the stake purchase did not depend on the fundraising succeeding. The fundraising depended on the acquisition. The only limit given was the ratio: the supporting funds could equal, but not surpass, the full price of the stake.