Chinese state-owned multinational, the Hisense Home Appliances Group has acquired a controlling stake in Sanden Holdings Corporation, a Japanese manufacturer of in-vehicle air conditioning systems.
The home-appliance company has purchased 83.6 million shares in Sanden at 256 yen ($US2.40) each at a total cost of $US200 million.
This gives Hisense 75 per cent of voting rights in Sanden, according to a statement to the Shenzhen Stock Exchange last week.
Hisense Home Appliances' shares, listed in Shenzhen and Hong Kong, soared after the deal was announced with its stock price in Shenzhen jumping 10 per cent which is the daily trading limit.
In Hong Kong, the company's shares closed up 6.3 per cent after jumping more than 12 per cent in early trading.
Sanden is best known for making compressors for air conditioners but more recently has been producing products for the electric vehicle market.
The high growth potential of the electric vehicle market, which is reflected in the share price of companies like Tesla, has generated a lot of interest from Chinese companies.
However, Sanden has had a tough couple of years, according to a report in Nikkei Asia.
The Japanese company entered special turnaround proceedings last July after getting hit by shrinking auto sales -- exacerbated by the coronavirus pandemic -- and mounting investments to accommodate the electrification of automobiles, as well as accruing losses for pulling out from Iran after pressure from the US.
Sanden intends to use two-thirds of the investment's proceeds for corporate restructuring purposes, while the remaining one-third will be invested in production facilities to manufacture heat-management systems for electric vehicles.
Hisense owns over 40 subsidiaries including Hisense-Hitachi Air-conditioning System Co Ltd which was established in 2003 as a joint venture with Hitachi.