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Investing.com-- Shares of Dongfeng Motor (HK:0489) surged on Monday, climbing as much as 85.8%, after the company announced that its parent entity Dongfeng Corp (SS:600006) is planning a restructuring initiative with another state-owned enterprise.
"The Restructuring may lead to a change in the Company’s controlling shareholder, but will not result in a change to the actual controller," the company said in a regulatory filing.
In a parallel development, Chongqing Changan Automobile (SZ:000625), another state-owned automaker, disclosed a similar restructuring plan by its parent company. This revelation has fueled speculation about a potential merger between Dongfeng and Changan.
Dongfeng Motor shares surged as much as 86% to HK$6 on Monday and were currently up 20% as of 04:21 GMT.
This also led to a 5.5% increase in Changan’s shares.
The restructuring still requires regulatory approval and necessary procedures. It is not expected to affect the company’s daily operations or production, Dongfeng said.