China's Geely becomes Daimler's top shareholder

25 February, 2018, 00:32 | Author: Lucy Floyd
  • A general view of the headquarters of Zhejiang Geely Holding Group in Hangzhou Zhejiang province

Geely has acquired close to 10 per cent of Mercedes-Benz owner Daimler for about $9bn, becoming its largest shareholder in the latest sign of the global ambitions of the Chinese group. With the upcoming $9 billion deal, Geely would surpass Daimler's current top shareholder Kuwait Investment Authority's 6.8 percent stake. Instead, the automaker is seeking to enter into an alliance with Daimler that will develop self-driving and electric vehicles, to respond to the many challenges from other competitors such as Tesla, Google and Uber, which all are working on technology vehicles of their own. No current auto industry player might win this battle against the invaders from outside without friends.

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"China wants a payback after spending a decade gifting the European auto industry super-normal growth and profits".

The Chinese automaker could announce the transaction in coming days, Bloomberg reported.

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Geely could not be reached for comment. 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.

Geely's expansion comes only weeks after a $3.9bn move to become the biggest shareholder in truckmaker Volvo AB.

Analyst Arndt Ellinghorst of Evercore ISI said: "We only believe that Geely would consider an investment of this magnitude if there was a more significant industrial opportunity from cooperation between Geely/Volvo and Mercedes". "Daimler already has a strong footing in China". Since Li's aims are simply for access, Geely has no intention of increasing its stake in Daimler beyond 10% or to take it over in full, the company said. Geely has not commented publicly on the goal of its investment, but is thought to be interested in Daimler's battery technology. "It is the duty of investors to follow these and to check them". "It will be an honour to support this unique team under the leadership of Dieter Zetsche in the future", Li Shufu, chairman and owner of Zhejiang Geely Holding Group and Geely Group said in a statement.

He added that Geely could give Daimler an important partner.



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