Hong Kong Exchanges and Clearing Limited and The Stock Exchange of Hong Kong Limited take no responsibility for the contents of this Announcement, make no representation as to its accuracy or completeness and expressly disclaim any liability whatsoever for any loss howsoever arising from or in reliance upon the whole or any part of the contents of this Announcement. None of the US Securities and Exchange Commission (the “SEC”), any US state securities commission or any other regulatory authority takes responsibility for the contents of this Announcement, or makes any representation as to its accuracy or completeness. The SEC, the US state securities commissions and all other regulatory authorities expressly disclaim any liability whatsoever for any loss howsoever arising from or in reliance upon the whole or any part of the contents of this Announcement. Any representation to the contrary is unlawful in the United States. This Announcement appears for information purposes only and does not constitute an invitation or offer to acquire, purchase or subscribe for securities of GAC or Denway, nor is it any solicitation of any vote or approval in any jurisdiction. This Announcement also does not constitute any solicitation or recommendation under the rules and regulations of the SEC. This Announcement is not an offer for sale or a sale of GAC Shares in the United States. The GAC H Shares have not been registered under the US Securities Act and may not be offered or sold in the United States absent registration or an exemption from registration under the US Securities Act. GUANGZHOU AUTOMOBILE GROUP CO., LTD. DENWAY MOTORS LIMITED 廣州汽車集團股份有限公司 駿威汽車有限公司 (a joint stock company incorporated (Incorporated in Hong Kong in the People’s Republic of China with limited liability) under the Companies Ordinance) (Stock code: 203) JOINT ANNOUNCEMENT (1) PROPOSED PRIVATISATION OF DENWAY BY GAC BY WAY OF A SCHEME OF ARRANGEMENT UNDER SECTION 166 OF THE HONG KONG COMPANIES ORDINANCE (2) APPOINTMENT OF VALUATION ADVISER TO ADVISE GAC AND VALUATION REPORT (3) INFORMATION PACK OF THE LISTING DOCUMENT AND (4) RESUMPTION OF TRADING IN DENWAY SHARES Joint Financial Advisers to GAC J.P. Morgan Securities Morgan Stanley Asia Limited China International Capital (Asia Pacifi c) Limited Corporation Hong Kong Securities Limited Independent Financial Adviser to Denway IBC BNP Paribas Capital (Asia Pacifi c) Limited Valuation Adviser to GAC Anglo Chinese Corporate Finance, Limited 1 INTRODUCTION Reference is made to the announcements jointly issued on 22 January 2010, 23 February 2010, 23 March 2010 and 26 April 2010 pursuant to Rule 3.7 of the Takeovers Code by GAC and Denway in respect of GAC’s proposed listing on the Stock Exchange by way of introduction and the corresponding proposed privatisation of Denway. The GAC Board and the Denway Board hereby jointly announce that on 18 May 2010, GAC formally requested the Denway Board to put forward the Privatisation proposal to the Scheme Shareholders with a view to privatise Denway by GAC. GAC has appointed J.P. Morgan, Morgan Stanley and CICC as its joint fi nancial advisers in connection with the Privatisation and the Scheme. Anglo Chinese has been appointed to advise the GAC Board as to the estimated value of GAC Shares. THE PRIVATISATION The Privatisation will be implemented by way of the Scheme. Under the Scheme, the Scheme Shares will be cancelled and, in consideration thereof, all Scheme Shareholders will be entitled to receive: For every Scheme Share cancelled . .0.378610 GAC H Shares It is expected that under the Privatisation, fractions of GAC H Shares will not be issued to the Scheme Shareholders. The Share Exchange Ratio of 0.378610 GAC H Shares for every Scheme Share cancelled was determined by GAC on the basis of, among other things, (i) the historical performance of GAC and Denway, (ii) the business potential of both GAC and Denway, (iii) the earnings forecast of GAC for the year ending 31 December 2010 (Please refer to the section headed “4.3 Profi t Forecast” and Annex C of this Announcement), (iv) the prevailing and historical market price levels of Denway and those of comparable companies, (v) the potential benefi ts of the Introduction and the Privatisation for Denway Shareholders and GAC Shareholders, (vi) the possibility, if the Privatisation does not proceed, that GAC may consider making an application for an initial public offering of its shares which would not involve a privatisation of Denway, (vii) the fact that the Denway 2009 Final Dividend has been declared, (viii) the fact that GAC H Shares (as opposed to cash) are being offered as consideration under the Scheme and that accordingly, upon success of the Introduction and the Privatisation, investors in Denway may participate as GAC Shareholders in a combined business which would include any benefi ts accruing from the combination and (ix) that the transaction does not represent a change of controlling shareholder of Denway. 2 On 17 May 2010, each of the Denway Optionholders gave Denway an irrevocable undertaking that (i) conditional upon the Scheme becoming effective, each of them will surrender their respective Denway Options for nil consideration with effect from the Scheme Effective Date; and (ii) each of them shall not exercise their Denway Options held by him until: (x) if the Scheme becomes effective, the Scheme Effective Date, at which time such Denway Options shall be surrendered pursuant to the terms of their respective irrevocable undertakings (and in any event shall lapse automatically in accordance with the terms of the Denway Share Option Scheme); or (y) if the Scheme is withdrawn, not approved or lapses, the date of such withdrawal, non-approval or lapse; and (iii) each of them shall not accept an offer in respect of their respective Denway Options if a comparable offer for the outstanding Denway Options were made. Total Consideration Anglo Chinese has estimated that the value of each GAC H Share on 19 May 2010 is in the range of RMB11.94 to RMB12.71 (equivalent to HK$13.62 to HK$14.49) per GAC H share. On the basis that for every Scheme Share cancelled under the Privatisation, Scheme Shareholders will receive 0.378610 GAC H Shares, the theoretical value of the consideration of each Denway Share would be in the range of HK$5.16 to HK$5.49. Accordingly, given that there are 7,518,698,534 Denway Shares in issue, the entire issued share capital of Denway as at 19 May 2010 would be theoretically valued in the range of HK$38,771,433,636 to HK$41,248,023,009. The foregoing paragraph is subject to the bases, limitations and assumptions set out on page 3 and 4 of the Valuation Report set out in Annex A of this Announcement. In particular, Scheme Shareholders, investors and potential investors should note that the value of GAC H Shares estimated by Anglo Chinese does not represent the trading price of GAC immediately following completion of the Introduction. The trading price of GAC may fl uctuate subject to prevailing market conditions and may materially differ from the value of GAC H shares estimated by the Valuation Adviser. Accordingly, Scheme Shareholders, investors and potential investors should not rely on the Share Exchange Ratio and the implied theoretical value of GAC H Shares as the basis of projecting the trading price of the GAC Shares upon completion of the Introduction. IMPLEMENTATION OF THE PRIVATISATION; WITHDRAWAL OF LISTING OF DENWAY SHARES GAC will implement the Privatisation in accordance with the relevant Hong Kong and PRC laws and regulations, the Takeovers Code, the Listing Rules and other requirements of the Stock Exchange. Listing status of the Denway Shares If the Scheme becomes effective Upon the Scheme becoming effective, all the Scheme Shares will be cancelled. The share certifi cates for the Scheme Shares will thereafter cease to have effect as documents or evidence of title. An application will be made by Denway to the Stock Exchange for the voluntary withdrawal of the listing of the Denway Shares from the Stock Exchange pursuant to Rule 6.15 of the Listing Rules immediately following the Scheme Effective Date, which is subject to the approval of the Listing Committee of the Stock Exchange. 3 If Scheme is not approved or the Privatisation lapses The listing of the Denway Shares on the Stock Exchange will not be withdrawn if the Scheme is not approved by the requisite majority of the Scheme Shareholders or the Privatisation otherwise lapses. In such event, the Denway Shares will continue to be listed and traded on the Stock Exchange. Further, there are restrictions under the Takeovers Code on making subsequent offers, to the effect that neither GAC nor any person who acted in concert with it in the course of the Privatisation (nor any person who is subsequently acting in concert with any of them) may within 12 months from the date on which the Privatisation lapses announce an offer or possible offer for Denway, except with the consent of the Executive. Furthermore, if the Scheme does not proceed, GAC may consider making an application for an initial public offering of its shares which would not involve the privatisation of Denway. REASONS FOR THE PRIVATISATION AND LISTING OF GAC BY INTRODUCTION The Privatisation Currently, GAC holds approximately 37.90% of the issued share capital of Denway. Denway in turn holds a 50% equity interest in Guangqi Honda through its wholly-owned subsidiary, Guangzhou Auto. GAC believes that this indirect holding of Denway and Guangqi Honda has not proved effi cient and does not give Denway Shareholders an opportunity to participate in the growth of the GAC Group as a whole during the Track Record Period as the GAC Group has signifi cant assets other than Guangqi Honda.