Dongfeng Motor Unveils $7.1B Privatization and EV Unit Spinoff

China’s state-owned Dongfeng Motor Group has announced a major strategic restructuring, planning to take its Hong Kong-listed unit private in a deal valued at approximately HK$55.1 billion (US$7.1 billion) while simultaneously spinning off its premium electric vehicle (EV) arm, Voyah, for a separate public listing.

The complex transaction is designed to address the chronic undervaluation of the parent company and unlock the higher growth potential of its EV division. Dongfeng is offering shareholders HK$6.68 per share, a premium of 11.9% over the stock’s last closing price before trading was halted on August 8. In addition to the cash, shareholders will receive shares in the newly listed Voyah entity.

This strategic pivot comes as China’s automotive sector grapples with an intense price war, which has eroded profit margins and put significant financial pressure on traditional automakers. By separating the high-growth Voyah brand, Dongfeng aims to attract investors focused on the EV market and create a more competitive structure against nimble rivals like BYD and Xiaomi.

Dongfeng’s management stated the company’s Hong Kong listing had “essentially lost its financing function” due to its low valuation, which has consistently lagged its net asset value. In contrast, the Voyah brand has demonstrated strong momentum, with deliveries in the first seven months of the year surging 87.5% year-on-year to 68,263 vehicles.

Voyah will list on the Hong Kong stock exchange through an “introductory listing,” a method that places existing shares onto the market without raising new capital at the time of the debut. The move mirrors a similar strategy employed by EV maker Nio for its Hong Kong listing in 2022. The restructuring news has been well-received by the market, with Dongfeng’s shares having surged over 80% earlier this year when initial plans were first reported.