Daimler safeguards against ‘hostile takeover’ by Geely

Dr. Dieter Zetsche, Vorsitzender des Vorstands der Daimler AG und Leiter Mercedes-Benz Cars im Generation EQ ;
Dr. Dieter Zetsche, Chairman of the Board of Management of Daimler AG and Head of Mercedes-Benz Cars in the Generation EQ;

Daimler has plans in place for its own protection, should there be any unsolicited takeover from its Chinese investor, according to Automotive News Europe. Founder of Geely and owner of Volvo Cars Li Shufu acquired 9.7% of Daimler worth 7.3 billion euros in February this year, and was reported shortly after to have to no further plans for share purchases.

Naturally, to have a party outside the Daimler group as the largest single shareholder is cause for the group’s concern for itself. Daimler reportedly turned down an offer from Geely for a 5% stake in November 2017 as it did not want its existing stocks diluted. Li likely acquired the Daimler shares from the open market.

“We have dealt with such a theoretical takeover scenario and prepared ourselves, but there’s no reason whatsoever to think about that in this relation. Of course, we have general plans – general – for such a situation, which we typically don’t announce, because then they already lose half of their effectiveness. But it’s clear that this is totally independent of this case,” said Daimler CEO Dieter Zetsche.

Zetsche was reported as saying he was ‘totally fine’ with the current stake holding, and the Daimler CEO had not asked Li for any guarantees against untoward stake movements. Talks with Li have continued over the Geely chairman’s wish for a collaboration, but these have not progressed beyond a simple exchange of views, the report said.

Daimler safeguards against ‘hostile takeover’ by Geely

“Nothing is specific, even less so has anything been decided. We are not even in the position to really define the areas of investigation, but it’s early stages so that’s totally normal. It’s very amicable and very constructive,” Zetsche noted of the dialogue with Li.

The Geely chairman told Bloomberg that he did not need to form synergies with Daimler and his companies for his investment to pay off, suggesting that he would be perfectly happy to receive dividends like any other shareholder.

Automotive News Europe makes a reference to the Porsche-Volkswagen stakeholding relationship from 2005, when the former announced its plans to acquire a 20% stake in the Wolfsburg brand. Porsche continued to build its share acquisition quietly, and attempted a leveraged buyout of the former, financed by VW’s own cash reserves.

Labour unions and the state of Lower Saxony stopped proceedings amidst fears of job losses, and both parties struck a deal which saw Porsche remain as the VW Group’s largest shareholder, in exchange for the dismissal of Porsche’s then-CEO Wendelin Wiedeking and CFO Holger Haerter.

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