Berlin ‘aware’ of Geely buying stake in Mercedes maker

Daimler and BAIC to invest almost $2bn in modernizing plant to build premium cars.

2019 Mercedes-Benz G- North American International Auto Show, January 14, 2018 in Detroit, Michigan [Photo/Scott Olson/Getty Images/AFP]
2019 Mercedes-Benz G- North American International Auto Show, January 14, 2018 in Detroit, Michigan [Photo/Scott Olson/Getty Images/AFP]

Daimler and its Chinese partner BAIC plan to invest almost $2bn in a state-of-the-art factory in China, underlining their relationship as rival Geely makes a surprise swoop on the German carmaker.

The two will invest more than 11.9 billion yuan ($1.88bn) in modernizing a plant to build premium Mercedes-Benz cars including electric vehicles, BAIC said in a filing to the Hong Kong Stock Exchange dated Friday and confirmed by Daimler on Sunday.

The chairman of Chinese carmaker Geely said late on Friday he had bought an almost 10 percent stake in Daimler, in a $9bn bet to access the Mercedes-Benz owner’s technology.

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

Geely’s Chairman Li Shufu, who quietly built up the 9.7 percent stake, is now expected to meet Daimler executives in Stuttgart on Monday, and hopes to meet top German government officials in Berlin.

His approach contrasts with that of previous Chinese investors in German technology companies – such as Midea, which bought Kuka, or Weichai, which bought a large stake in Kion – who have tended to engage in lengthy consultation with stakeholders.

Berlin said it saw no need to take any action over Geely’s purchase, either in terms of competition rules or foreign investment rules.

“It is a company decision,” a government spokesman said. “Due to the character of the investment as a minority stake, there is no need to act.”

The government declined to comment on a report in German tabloid Bild am Sonnntag that Li would visit the German chancellery for a “secret meeting” with Angela Merkel’s economic adviser on Tuesday.

Daimler also declined to comment on any possible meetings with Li.

Geely said it wants an alliance with Daimler, which is developing electric and self-driving vehicles and is the only German carmaker not to be controlled by a family, to respond to the challenge from new rivals such as Tesla and Uber.

Source: Reuters

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