Mubasher: Volkswagen is nearing the closure of a deal to acquire a 20% stake in China’s electric vehicle battery maker Guoxuan High-tech Company, sources familiar with the matter told Reuters.

The deal, which may worth $560 million, would be Volkswagen’s first direct ownership in a Chinese battery maker.

It will also see the German automaker moving closer to its goal to sell 1.5 million new energy vehicles annually in China by 2025.

Moreover, Volkswagen is planning to complete the acquisition of Guoxuan High-tech through a discounted private share placement in the coming weeks.

The finalisation of the deal is pending the establishment of new Chinese regulatory rules on private share placements that will provide a more flexible pricing mechanism and shorter lock-up periods for majority shareholders, an informed source said, according to Reuters.