China’s BAIC to double stake in Daimler, win a board seat and unseat Geely as top shareholder – report

China’s BAIC to double stake in Daimler, win a board seat and unseat Geely as top shareholder – report

Daimler’s joint venture partner in China is the BAIC Group. Daimler’s biggest shareholder is a Chinese carmaker. However, that Chinese carmaker is not BAIC but Geely. BAIC sees this as a sore point and is looking to remedy the situation by doubling its stake in the Mercedes-Benz maker to around 10%, according to a Reuters report quoting two sources.

The state-owned Beijing Automobile Group (BAIC) is also aiming for a board seat at Daimler, which Geely – currently holding 9.69% of the German company – does not have. The report says that BAIC, which at present holds a 5% stake that it bought in July, has started buying more Daimler shares from the open market. Should it achieve 10%, BAIC would surpass Geely and become Daimler’s largest shareholder.

Daimler said in a stock market filing last month that HSBC held 5.23% in Daimler’s voting rights directly as well as through instruments such as equity swaps as of November 15. The bank, which advised BAIC on its 5% stake purchase earlier this year, is helping the Chinese carmaker in the new investment, one of the sources told Reuters.

When queried, Daimler said that it has no knowledge of BAIC’s move. Daimler’s China boss Hubertus Troska however said “we welcome long-term investors in Daimler.” Asked about BAIC and Daimler, he added: “We like each other. Let us see how things develop.” Both BAIC and Geely declined to comment.

China’s BAIC to double stake in Daimler, win a board seat and unseat Geely as top shareholder – report

Daimler AG’s shareholder structure as of October 31, 2019

Here’s the background. BAIC has been Daimler’s long-time partner in China and the JV company (Beijing Benz Automotive) produces Mercedes-Benz models in the world’s biggest car market. Both parties also have plans to produce Mercedes Benz trucks via their commercial vehicle joint venture Foton Daimler Automotive.

All was fine before Geely chairman Li Shufu built a 9.69% stake in Daimler in early 2018. According to the newswire, by using Hong Kong-registered shell companies, derivatives, bank financing and structured share options, Li kept his Daimler plan under wraps until he was able to become Daimler’s single largest shareholder, at one stroke.

Since then, the owner of Volvo has sought to get close to Daimler, and in March, both parties announced the formation of a 50:50 joint venture for the ownership, operation and development of the Smart brand’s family of small urban vehicles. The new JV will see next-gen Smart EVs assembled at a new purpose-built plant in China, with global sales set to commence in 2022. Geely and Daimler are also working on a ride-hailing business together.

If this sounds like a love triangle between two Chinese suitors and the trophy called Daimler in the middle, it probably is.

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Danny Tan

Danny Tan loves driving as much as he loves a certain herbal meat soup, and sweet engine music as much as drum beats. He has been in the auto industry since 2006, previously filling the pages of two motoring magazines before joining this website. Enjoys detailing the experience more than the technical details.

 

Comments

  • Amran on Dec 16, 2019 at 2:18 pm

    Alright , the future is in EV. BYD is the One.

    Like or Dislike: Thumb up 4 Thumb down 2
  • Ahmad Fadzly Ahmad Fuad on Dec 16, 2019 at 2:43 pm

    Hard to read the pie chart.
    Turquoise, navy blue and dark blue are just BLUE for me.

    Like or Dislike: Thumb up 31 Thumb down 0
    • seancorr (Member) on Dec 16, 2019 at 3:19 pm

      Lol I was just about to comment on that.

      Like or Dislike: Thumb up 3 Thumb down 0
      • Inconsequential. All u need to know is, eventually all the pie are belong to China!

        Like or Dislike: Thumb up 6 Thumb down 1
        • Vader on Dec 16, 2019 at 4:20 pm

          Ultimately, the next supercentury belonged to Daimler baic geely volvo. p1 is safe …

          Like or Dislike: Thumb up 4 Thumb down 0
    • sick&tired on Dec 16, 2019 at 8:41 pm

      I am glad I wasn’t the only one! So difficult to read la!

      Like or Dislike: Thumb up 0 Thumb down 0
  • The chinese are conquering the Germans now. Even your japs & german lords are seeking help from them lol

    Like or Dislike: Thumb up 10 Thumb down 1
    • Logical Deduction on Dec 16, 2019 at 3:36 pm

      Habislah Germany has sold out to China! *sarcasm follow our troll logic*

      Like or Dislike: Thumb up 10 Thumb down 0
 

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