BMW Bayerische Motoren Werke AG

   By Kim Richters 
 

BMW AG said Friday that it is increasing its stake in the Chinese joint venture with Brilliance China Automotive Holdings Ltd., after receiving the relevant business license from Chinese authorities.

BMW's stake in the venture, called BMW Brilliance Automotive Ltd. increases to 75% from 50% and will be fully consolidated in the German car maker's financial statements as of Feb. 11. It expects payment for the acquisition to be complete by Feb. 22.

Its Chinese partner Brilliance China Automotive Holdings will keep the remaining 25%, said BMW. The two companies initially agreed on the ownership changes and an extended joint-venture contract until 2040 in 2018.

BMW said its existing 50% stake in the joint company is being revaluated and should lead to a positive one-off impact for its financial result in the automotive segment of between 7 billion euros to 8 billion euros ($8 billion to $9.14 billion).

The consolidation will lead to revenue and earnings before interest and taxes in the automotive segment increasing significantly, but will have negligible effect on the auto EBIT margin for 2022, BMW said. The segment's free cashflow will see an one-time increase of around EUR5 billion.

BMW shares rose on the news, trading 2.4% higher at EUR94.95 at 1153 GMT.

The premium car maker sold 846,237 BMW and MINI vehicles in China in 2021, 8.9% more than the previous year.

Write to Kim Richters at kim.richters@wsj.com

(END) Dow Jones Newswires

February 11, 2022 07:13 ET (12:13 GMT)

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