Credit Agricole in talks to invest in Guangzhou Auto unit

CREDIT Agricole is in advanced talks to invest in the financial leasing unit of Guangzhou Automobile (GAC), sources said, as it seeks to tap China’s electric-vehicle market – the biggest in the world. 

The French lender’s consumer finance unit, Credit Agricole Personal Finance & Mobility, plans to buy about 50 per cent of GAC’s leasing unit with a capital increase, sources noted, asking not to be identified because the discussions are private. 

The transaction would give the leasing business a valuation of about US$600 million after completion, the sources said.

The companies are working out the details of a partnership agreement that could be announced as soon as next month, pending regulatory approvals in China. No final decisions have been made, they added.

A representative for Credit Agricole declined to comment. GAC did not immediately respond to requests for comment. 

Credit Agricole Personal Finance & Mobility and GAC have had a 50:50 joint venture since 2010, known as GAC-Sofinco Automobile Finance, which provides services such as credit for car purchases mostly in China. BLOOMBERG