(Yicai Global) Aug. 25 -- Japanese auto group Mazda Motor’s two joint ventures in China have taken new steps to join their forces for business consolidation amid the Mazda brand owner's increasing cooperation with Changan Automobile.

State-owned car giant China FAW will acquire a 5 percent stake in the merged company Changan Mazda through an equity swap via its 60 percent stake in FAW Mazda Motor Sales, according to a joint statement Mazda Motor, as well as its partners Changan Automobile and FAW, released yesterday. After that, Mazda and Changan will each hold a 47.5 percent stake in Changan Mazda.

Yicai Global exclusively reported last April that the three shareholders were in talks to reorganize the Hiroshima-headquartered company's two Chinese JVs, Changan Mazda and FAW Mazda. The plan allegedly was to move FAW Mazda’s existing Mazda brand-related business under Changan Mazda.

The Japanese passenger carmaker set up the two JVs in 2005. The firm has a 50 percent stake in the venture with Chongqing-based Changan, and a 40 percent stake in the other JV with Changchun-headquartered FAW.

Changan Mazda is officially intended to take over FAW Mazda. The former firm plans to buy all the shares the Japanese shareholder has in the sister JV through equity and cash to gain full control of FAW Mazda, according to a document the Anti-Monopoly Bureau of the State Administration for Market Regulation released yesterday.

However, the planned merger is still subject to regulatory approval, a source close to Mazda Motor told Yicai Global. After the acquisition is completed, FAW Mazda should become a wholly-owned subsidiary of Changan Mazda and change its name.

The bigger fish is swallowing the smaller one. FAW Mazda sold nearly 36,500 cars in the first seven months of this year, falling by 26 percent from a year ago, according to data from the China Passenger Car Association. Changan Mazda sold more than 70,300 units, up 4 percent.

Editor: Emmi Laine, Xiao Yi