SAIC Allows GM Equal Operating Control of Joint Venture

General Motors Co. says it has reached an agreement to share 50:50 operating control of its Chinese joint venture with Shanghai Automotive Industry Corp. The deal still needs the approval of municipal and national authorities.

The U.S. company currently holds a 49% stake in Shanghai General Motors. GM sold SAIC a 1% stake in 2009 to obtain $85 million in badly needed cash. CEO Dan Akerson said in January that the company aimed to buy back that stake.

The new arrangement will give GM a bigger say in decisions in its largest market. Akerson describes the venture as his company's "principal relationship" worldwide. He says GM hopes to expand the partnership's overseas operations in India and South America.

The deal would split Shanghai GM into separate units for sales and operations, says The Wall Street Journal, which first reported the deal. It says the partners would own equal stakes in the operating unit, which has control over budgets, product decisions and selection of top executives.

SAIC would keep 51% of the sales unit, according to the Journal. Chinese accounting rules allow a company to report a venture's revenue on its books only if it owns more than half of the business.

It isn't clear what, if anything, GM will pay SAIC for the 1% increase in operating control.