SAIC OKs Sale to GM of 1% Stake in Venture

Shanghai Automotive Industry Corp.'s board has approved selling back to General Motors Co. a 1% stake the operations of their joint venture for $91 million.

The deal, which would make Shanghai General Motors a 50:50 partnership, still requires Chinese government approval.

The venture began in 1997 with equal ownership. GM sold the 1% stake to SAIC in 2009 for $85 million in much-needed cash. The American company is eager to regain a bigger say in its operations in its largest market.

Under the deal reached this spring, the venture would split into separate units for sales and operations. The two companies would be equal partners for the operating unit. SAIC would keep 51% of the sales unit. Chinese accounting rules allow a company to report a venture's revenue on its books only if it owns a majority the business.