June 28 -- Shareholders of Guangzhou Automobile Group (GAC) (2238.HK) yesterday approved the company's plan to issue A shares and acquire GAC Changfeng Motor (600991) via a share swap, reports cs.com.cn.

On the same day, Chengfeng Motor held a shareholder meeting in which the share swap plan with Guangzhou Automobile Group was approved.

According to the plan, the issue price of GAC's A shares will be 9.09 yuan per share, while the price at which Changfeng will swap shares will be 14.55 yuan per share, a premium of 15 percent over the stock's 20-day average price of 12.65 yuan per share right before the shareholder meeting.

Each share of Changfeng Motor can be converted into 1.6 shares of GAC’s A shares.

The plan granted two cash options to existing shareholders of Changfeng Motor.

Changfeng Group, the parent of Changfeng Motor, and the second-largest shareholder of GAC with a shareholding of 114 million shares, opted for the cash option.

The share swap plan will soon be filed for approval by the China Securities Regulatory Commission.

According to Zhang Fangyou, chariman of GAC, the group will introduce new car models, expand capacity, improve innovation and extend its industrial chain.