Credit Agricole is said to be in talks to invest in Guangzhou Auto unit

GUANGZHOU: Credit Agricole SA is in advanced talks to invest in Guangzhou Automobile Group Co.’s financial leasing unit, people familiar with the matter said, as it seeks to tap into China’s electric-vehicle market, the biggest in the world.

The French lender’s consumer finance unit - Credit Agricole Personal Finance & Mobility - plans to buy about 50% of GAC’s leasing unit via a capital increase, the people said, asking not to be identified because the talks are private.

A transaction would give the leasing business a valuation of about $600 million after completion, according to the people.

The companies are working out the details of a partnership agreement that could be announced as soon as next month, pending regulatory approvals in China, the people said. No final decisions have been made, they added.

A representative for Credit Agricole declined to comment. GAC didn’t immediately respond to requests for comment.

Credit Agricole Personal Finance & Mobility and GAC have had a 50-50 joint venture since 2010 known as GAC-Sofinco Automobile Finance Co., which provides services including credit for car purchases mostly in China.