Volkswagen China will become the biggest shareholder of Gotion High Tech, the third-largest Chinese lithium battery maker, based on agreements signed on Thursday, the National Business Daily reported.

Through private placement and share transfer, VW will hold 441 million shares of Gotion High Tech, accounting for 26.47 percent of the total shares of the listed company. Li Zhen and the persons acting in concert will hold 303 million shares, dropping to the second-biggest shareholder.

But according to the agreements, Li Zhen will continue to be the actual controller in at least 36 months from the date when the share transfer and private payment are under VW China's account. VW will have at least less than over 5 percent voting power than that of Li Zhen and his persons acting in concert, the company's founding shareholders. When the deals are complete, VW China will account for 13.2 percent of the total voting power, while Li Zhen and his persons acting in concert, 18.2 percent.

When the 36-month commitment expires and in case the German automaker withdraws abstained voting power, VW will become the biggest shareholder with the largest voting power, and the actual controller will shift.

Gotion High Tech said the purpose of the deals "is for the company's strategic development". "The company's strategic cooperation relationship with VW China benefits both sides by complementing each other's advantages in technology and resources. It will advance common development of the two sides in the new energy sector."

In China, Gotion's gross amount of installed batteries was only behind that of CATL and BYD in 2019.