TPG exits China Grand Auto in $700m sale

Chinese conglomerate Haitong Securities will acquire a 40% stake owned by the private equity firm

TPG Capital has agreed to sell its stake in China Grand Automotive Services for almost $700 million to an investor group led by Haitong International Securities, according to a disclosure with the Hong Kong Stock Exchange.

The deal, which serves as a full exit for the global private equity firm, sees 40 percent of the auto dealer change hands about seven years after TPG’s original investment.

The firm has since made several attempts to list the business in Hong Kong, but never completed an IPO, media reports have said previously.

It is unclear how much TPG’s initial investment was in the business. The firm did not respond to requests for comment by press time.

China’s automotive market has attracted widespread interest from private equity houses in the region.

In August this year, Kohlberg Kravis Roberts-backed China Rundong Auto raised $124 million in a Hong Kong listing, although it was at the lower end of the range for the luxury car dealership. The firm had planned to raise as much as $300 million.

CDH Investments, Warburg Pincus and CITIC Capital Partners have all been involved in deals capitalising on the heavy growth of the automobile sector in China.

Limetree Capital, a Hong Kong-based firm, raised $339 million in July towards a car park fund addressing China’s lack of car parking spaces and growing number of vehicles on the road. Similarly, China Resources Capital teamed up with Dutch pension fund asset manager APG to establish a $265 million fund focused on investing in city car parks in China in February last year.