Dongfeng Motor Group’s Hong Kong-listed shares rose 69% to HK$10.1 (US$1.3) on August 25, after the Chinese automaker announced plans to delist from Hong Kong and list its Voyah EV unit.

Trading resumed after a two-week suspension.

Dongfeng said Hong Kong shareholders will receive HK$6.68 (US$0.9) in cash and 0.36 Voyah H shares for each Dongfeng share under the restructuring.

The company set the deal’s theoretical value at HK$10.9 (US$1.4) per share.

Voyah is Dongfeng’s luxury EV line.

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🔗 Source: Bloomberg

🧠 Food for thought

1️⃣ Privatization offers strategic escape route for struggling automotive companies

Dongfeng’s privatization follows a broader pattern where companies use delisting to pivot during financial challenges.

The OldTown privatization in Malaysia provides a parallel example, where JDE Asia paid a 10.42% premium for the coffee chain company despite its declining performance, including a 52.2% drop in net profit and share prices that hadn’t exceeded the offer price in three years 1.

Similar to Dongfeng’s restructuring around its Voyah EV brand, JDE Asia’s acquisition aimed to enhance management flexibility and reduce public company compliance costs while executing a strategic transformation 1.

This privatization-restructuring approach allows companies to reallocate resources without public market pressures, particularly relevant as the automotive industry faces significant transformation pressures from electrification 2.

2️⃣ Chinese EV dominance creates urgency for traditional automaker restructuring

Dongfeng’s focus on spinning off its luxury EV brand reflects the intense competitive pressure in China’s electric vehicle market.

China now accounts for over half of all electric vehicles sold globally, creating an environment where traditional automakers must rapidly restructure to compete 3.

The urgency is evident in broader industry trends—global EV sales jumped 25% to 17.8 million units in 2024, with projections reaching 21.3 million in 2025 4.

This market dynamic forces traditional automakers like Dongfeng to separate their conventional and electric vehicle operations, allowing EV divisions to attract specialized investors and compete more effectively against pure-play electric vehicle manufacturers.

The restructuring pattern extends beyond individual companies, as the automotive industry faces significant challenges due to electrification, which experts suggest could render many traditional components obsolete 5.

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