By on December 22, 2011

Germany’s luxobarge makers aren’t just happy selling their luxobarges to China. Now they want Chinese money straight up. Daimler is flirting with the Chinese sovereign wealth fund China Investment Corporation (CIC), which may want to buy 5 or 10 percent of Daimler.

Sovereign wealth funds invest their money in stocks, where it supposedly yields more than buying T-bills denominated in a devaluing dollar.

According to Germany’s manager magazin, China had shown interest in a piece of Daimler for years, but always had been outbid and outbought by rich sheikhs. In 2009 for instance, the Abu Dhabi sovereign wealth fund Aabar was faster than the Chinese.

Now, Daimler hired an investment bank with the declared goal to get the Chinese on board. Daimler sees bunches of positive aspects to a Chinese engagement. If the Chinese government has money riding on Daimler, it might buy more Benz and less Audi.

Daimler is also interested in intensifying its joint venture with Beijing’s BAIC, and could plow the money right back into that. The Chinese should like that.

Finally, having about 30 percent of the stock in the hands of „friendly“ shareholders would be good insurance against a hostile takeover, the magazine heard in Stuttgart.

 

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4 Comments on “Daimler Is Looking For Love In China...”


  • avatar

    getting in bed with a mandarin often leads to one wishing a farewell my concubine.

    zai jian.

  • avatar
    VanillaDude

    Once I ordered Chinese in Bremen.
    It wasn’t what I expected.
    I thought it would be, you know, like Chinese food.

    Instead it was more like Chinese food made by FEBO. FEBO is where you eat out of stainless steel coin operated automat doors. You plop a Euro into the slot next to the little window, yank open the slot, and scoop out the supposedly edible Dutch creation. French fries, they make fresh by order, but anything else – reach for a window. FEBO seems to be awesome after spending half a day in a Dutch coffee shop, so perhaps it is best eaten with a sniggle of blonde hash.

    So, I suppose this could work for Daimler, but I think it will be very important for them to be open minded and have a bottle of ipecac handy to prevent poisoning. Oh – and I recommend they smoke up well in advance.

  • avatar
    daveainchina

    Actually this may be pretty savvy on their part. I would say that the defining characteristic of any official in China is first, protect yourself and 2nd greed.

    So if they pull this off right, they get to use both of those 2 characteristics to protect themselves from IP theft.

    Recently I read an article about a Chemical process involved in plastics where a State run company stole the IP from a private Chinese company. The owner of the private company can’t investigate because it’s been labeled “national security” or something like that.

    The only way I see to protect yourself against such blatant ripoffs is to have another State run company have a vested interest in your success.

    That to me is what it looks like Daimler is doing here. We’ll have to see if it works long term, but for now, I think if you have to deal with China, it’s smart move.

  • avatar
    Trend-Shifter

    Unfortunately China’s big business and government feeds on corruption. The “Feast from the Emperor’s grain” mentality is so ingrained in the Chinese culture that it could be the unwinding of their fantastic accomplishments over the past 30 years.

    So if an automakers wants future success in this environment this sure looks like a winning formula. This allows the automaker to avoid having to participate in the corruption or influence game while reaping the benefits.

    BTW.. It sure cost me a lot of cash going to Chinese weddings and giving red envelopes!


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