Volkswagen AG is nearing a deal to acquire 20% of Chinese battery-maker Guoxuan High-tech Co. Ltd. as part of its electrification push into the region, Reuters reported Jan. 17, citing sources.

Guoxuan's shares rose by the stock exchange maximum of 10% to 18.79 Chinese yuan on the news. The Hefei-based company has a market cap of $3.10 billion, making a 20% stake worth about $621 million.

The companies expect to announce the "mostly finalized" deal in the coming weeks, the report said.

Volkswagen plans to acquire the stake through a discounted private share placement and is waiting for new regulations to take effect before proceeding further with the transaction. The policies to be introduced would shorten lock-up periods and provide more flexible pricing mechanisms, the report said.

Should the deal go through, Volkswagen will become the company's second-largest shareholder behind Zhuhai Guoxuan Trading, an entity controlled by Guoxuan's founder Li Zhen, which holds 25%.

Separately, China's Securities Times newspaper reported that an executive at Guoxuan's board secretary's office said it had no knowledge of the deal.

As of Jan. 16, US$1 was equivalent to 6.88 Chinese yuan.