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Geely acquires 10-percent stake in Mercedes-Benz parent Daimler

25 February, 2018, 02:00 | Author: Lydia Fleming
  • China's Geely makes $9 billion Daimler bet against tech invaders

Chinese automaker Zhejiang Geely Holding Group Co. announced it is acquiring a almost $9.2 billion (or 7.5 billion euro) stake in German luxury auto group Daimler AG.

Li Shufu, the chairman and main owner of Chinese carmaker Geely, has built a stake of 9.69 percent in Daimler AG, the German carmaker said in a regulatory filing on Friday. Nissan Motor Co. and Renault SA already hold stakes.

"Daimler knows and appreciates Li Shufu as an especially knowledgeable Chinese entrepreneur with a clear vision for the future, with whom one can constructively discuss the change in the industry".

The rumour mill has been working overtime since Daimler refused to sell a chunk of its stock at a discount to Geely Chairman Li Shufu past year, suggesting he might instead buy the stock on the market if he was so keen.

The company paid 1.8 billion dollars to buy Volvo from USA carmaker Ford in 2010, bringing a renaissance to the Swedish-Chinese brand.

Li, 54, is 10th on Forbes magazine's China Rich List and 209th on its global billionaires ranking, with an estimated net worth of US$16.6 billion (RM65 billion).

Last year, Geely Holding bought a 51% stake in Lotus, the British sports vehicle maker.

Late a year ago, Geely acquired a stake in the Volvo Trucks group, a separate entity, becoming its largest investor in a deal that has not yet closed.

China's avid search for footholds in Europe has raised hackles among some politicians in Berlin, Paris and Brussels.

Daimler is the world's oldest automaker, with brands including Mercedes-Benz and Smart cars, as well as heavy trucks.

It is to become a holding company combining three divisions: financial services, cars and small commercial vehicles and trucks and buses. Volvo announced past year that none of its new models from 2019 will have simple combustion engines, but will be powered at least partly by electricity and other sources. Volkswagen AG is owned by the Porsche-Piech billionaire clan with the government of Qatar counting as a major stakeholder, and BMW is owned by the wealthy billionaire Quandt-Klatten family.

Following the potential deal, Zhejiang Geely would surpass Kuwait Investment Authority, as Daimler's top shareholder.

Photo A Mercedes-Benz assembly line operated by Daimler in Sindelfingen, Germany.


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