A full takeover of Nanjing Automobile by its domestic rival Shanghai Automotive will be sealed on Boxing Day, the Birmingham Post has learned.
The two companies - which have competed over the MG Rover legacy - have agreed in principle to a merger. Under the terms of the deal Nanjing Automobile Corporation (NAC) would own no more than 15 per cent of SAIC.
Sources said the deal would not affect NAC's plans to restore vehicle production to Longbridge and relaunch its version of the MG TF early next year.
The deal would create the biggest Chinese automotive maker, with a combined production of more than 1.1 million vehicles.
The deal would be a step towards creating a national Chinese car champion that would eventually compete head-on with global giants.