SAIC Motor, of Shanghai, a partner of Volkswagen AG and General Motors, will issue 1.7 billion shares at 16.5 yuan each in payment for the assets, SAIC said in a statement.

The purchases will boost the company's electric vehicle business, consolidate its supply chain and develop its services and export operations, SAIC Motor said.

The unit of state-owned Shanghai Automotive Industry Corp. is expanding as vehicle sales jumped 32 percent last year in China, the world's biggest auto market.

Net income more than doubled to 13.7 billion yuan last year from 6.6 billion yuan in 2009, and sales rose 32 percent to 3.6 million vehicles. SAIC predicted its deliveries will rise 12 percent to exceed 4 million units this year.

After the share sale, Shanghai Automotive's stake in SAIC Motor will rise to 77 percent, from almost 73 percent now, according to the statement.

The SAIC Motor purchases include 60 percent of Huayu Automotive Systems Co., a listed auto parts-making unit of Shanghai Automotive, and the 6 percent stake in GM Korea Co. that's owned by the parent company.

SAIC Motor last bought vehicle-making assets from Shanghai Automotive in 2006 as part of a wider transfer of businesses from Chinese state-controlled companies to listed units. Huayu also bought car-parts operations from the parent in 2008.