Chair of China's Geely Auto buys 10 per cent stake in Daimler

Judith Bessette
Março 5, 2018

The move poses a challenge to Daimler, which as well as its Chinese partnership with BAIC Motor Corp. has an industrial alliance to develop cars and trucks with Renault-Nissan, which owns a 3.1% stake in Daimler.

German Chancellor Angela Merkel says regulators are reviewing the acquisition of nearly 10 percent of Daimler's shares by Chinese businessman Li Shufu, chairman of Zhejiang Geely, but that there don't seem to have been any violations. In China, these vehicles are dubbed NEVs, or New Energy Vehicles.

Notheis declined to comment, while Bao was not reachable. He appealed to the leadership of the German concern with a request to issue additional securities, however, Daimler has refused, citing a reluctance to infringe upon the rights of private shareholders.

Speaking of expansion in China, just a few days ago, February 26, Daimler and BAIC announced plans to further expand production. Last week, China's government temporarily took over Anbang Insurance Group Co, whose buying binge including properties such as Manhattan's Waldorf Astoria hotel has come to symbolize the overreach of the nation's debt-laden conglomerates.

Daimler is building on its joint-venture with BAIC, a Chinese state-owned company and one of the biggest automakers in the country. Elsewhere, it was reported Geely was keen to access Daimler's electric car battery technology, and hoped to set up an electric car joint venture with the German auto giant in Wuhan, capital of Hubei province. "By deepening our cooperation with our local partner BAIC, BBAC will continue playing a key role for Mercedes-Benz in China", said Hubertus Troska, Member of the Board of Management of Daimler AG, responsible for Greater China.

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Li Shufu is keen on global expansion as they also bought a 49.9 percent share of Lotus under Geely. Stealth raidGeely responded to the rejection in November by enlisting Dirk Notheis, the former Chief Executive of Morgan Stanley in Germany and Yi Bao, a former CEO of Morgan Stanley Huaxin Securities, sources familiar with the matter told Reuters. The deal is also reportedly Daimler's largest foreign purchase by an individual to date.

BAIC Group chairman Xu Heyi said: "With over a decade of remarkable achievements, BBAC stands as evidence of the strong collaboration between BAIC and Daimler".

But BAIC Motor warned the same day that its own net profit for the period likely dropped about 65% from the 6.36 billion yuan of 2016.

The Wall Street Journal described Geely's investment in Daimler as a "milestone for China", saying "a closer association could be a boon for Daimler, too".

Volvo owner Geely has no immediate plans to buy more into Mercedes-Benz parent Daimler after becoming the German brand's largest shareholder. Daimler's Car2Go car-sharing is poised to grow substantially as a provider of self-driving, using electric vehicles that may not even have controls for a human driver.

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