November 10, 2010 / 11:26 PM / 9 years ago

EXCLUSIVE - China's SAIC near GM IPO stake buy -- sources

Chevrolet cars are seen at a GM dealership in Miami, Florida August 12, 2010. REUTERS/Carlos Barria

DETROIT/NEW YORK (Reuters) - General Motors Co [GM.UL] is in the final stage of talks to sell equity to long-time Chinese partner SAIC Motor Corp Ltd (600104.SS) in conjunction with its landmark initial public offering, two people familiar with the matter said.

The two government-funded automakers are currently finalizing how much of a stake SAIC would buy in the top U.S. automaker after discussions involving technology sharing and SAIC’s ambitions to move beyond the China market, the people said.

Any agreement between GM and SAIC would need Chinese government approval and could still fall apart, the people cautioned.

GM is set to price its roughly $13 billion IPO on Nov. 17 and start trading the next day.

Its executives and bankers are courting investors, including overseas sovereign wealth funds expected to buy nearly $2 billion worth of shares, sources previously told Reuters. GM and its bankers have not set a maximum value for investment by sovereign wealth funds, one source said on Wednesday.

The potential investment in GM by China’s top automaker would expand a 13-year old joint-venture in China and their newly established relationship in India to a broader global stage.

One person familiar with the matter said previously that SAIC initially reached out to GM to explore the prospect of taking a “single-digit” stake in GM. The size of SAIC’s prospective investment was not known.

The final round of talks have been led by SAIC Vice Chairman Chen Hong and could conclude as soon as the weekend, that source said.

The people were not authorized to speak with the media and declined to be named because the talks are private. Representatives for GM and SAIC declined to comment.

Reporting by Kevin Krolicki and David Bailey in Detroit, Soyoung Kim and Clare Baldwin in New York, Philipp Halstrick in Frankfurt, Fang Yan in Beijing; editing by Andre Grenon

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