Beiqi Foton Motor Co Ltd said its board has approved the establishment of joint venture with Germany's Daimler AG to produce medium and heavy-duty trucks, as well as their engines and parts.
In a statement filed with the Shanghai Stock Exchange, the company said registered capital of the joint venture - Beijing Foton Daimler Automotive Co Ltd - will be 5.6 bln yuan, with total investment to hit 6.35 bln yuan.
Beiqi Foton will inject all production assets of its Auman brand into the venture for a 50 pct stake, while Daimler AG and its subsidiary, Beijing-based Daimler Northeast Asia, will take 40 pct and 10 pct stakes respectively, paid for in cash.
The deal comes after Shanghai-listed Foton scrapped plans to sell a 24 pct stake to Daimler late 2007 after failing to win government approval.
Beiqi Foton said the joint venture is expected to be established in August, with production of engines and trucks expected to start from 2011 and 2012.
After the completion of the joint venture, the two parties also plan to form a joint venture in Russia in two years, in South Asia in three years and in South America in five years, Beiqi Foton said.
The deal is subject to approval by of shareholders and the National Development and Reform Commission.