Hogan Lovells advises subsidiary of Crédit Agricole on its proposed acquisition of a 50% stake in GAC Finance Leasing

This transaction follows on from the establishment of GAC-Sofinco Auto Finance Co. Ltd. (GAC-SOFINCO) in 2010, the first joint venture between CAPFM and GAC Group, which is the only Auto Finance Company in Guangdong Province and one of the largest operators in its category. Hogan Lovells also supported CAPFM on that transaction and continues to advise CAPFM on matters relating to its investment in GAC-SOFINCO. Through the new joint venture, CAPFM is expected to offer financial and operational leasing solutions on the Chinese market in 2025 and will thus promote the deployment of electric vehicles in China.

Hong Kong corporate partner Andrew McGinty led the Hogan Lovells team on both the establishment of GAC-SOFINCO and on the investment in GAC Leasing, with support on the latter transaction from M&A counsel Wensheng Ren at Hogan Lovells Fidelity and partner Adrian Emch in Beijing on the competition law aspects.  The key transaction documents for the investment in GAC Leasing were signed in Paris on 15 October but closing will take place at the end of 2024 or early 2025 pending various government approvals in China.

Commenting on the transaction, Andrew said: “We are delighted to have the opportunity to extend our support to CAPFM and Crédit Agricole Group on this highly strategic investment, building on our long-standing relationship. At a time when some investors are withdrawing or reducing exposure to the Chinese market, this transaction shows that with persistence and patience (the transaction has taken over 3 years to get to this stage) dealmaking in China continues apace. We are proud to be part of this exciting journey in the expansion of the collaboration between the Crédit Agricole Group and the GAC Group and look forward to the new venture playing an important role in the development of automobile financing and, in particular, electric vehicles in the Chinese market.”