GAC halts trading in Shanghai and Hong Kong as FAW merger speculation swirls

Trading in GAC Group (SSE: 601238) was suspended on both the Shanghai and Hong Kong exchanges on Monday, September 14, after the Shanghai Stock Exchange flagged a pending material disclosure. According to Yicai, a company employee said the halt was arranged only that morning and that a significant announcement was expected once markets closed, though neither its timing nor its contents could be confirmed.

The suspension caps a weekend of mounting speculation about a deal between GAC and FAW, with talk spanning everything from an "equity partnership" to a full strategic restructuring. GAC has declined to comment on the reports. Its A-shares last changed hands at 5.09 yuan, leaving the stock down 37.85% since the start of the year.

Any such combination would arrive just as Beijing leans harder on the auto sector to consolidate. On September 11, the MIIT and eight other government departments issued a five-year roadmap for the intelligent connected NEV industry that pushes mergers, cross-regional integration and the exit of outdated capacity through market and legal mechanisms. At a press briefing the same day, NDRC official Shao Ji said policymakers back restructuring among large corporate groups and want leading players to pool R&D and production resources rather than compete on lookalike products.