Report: China's BAIC Wants to Increase Daimler Stake
A new report indicates that BAIC Motor Corp, Daimler’s primary Chinese joint-venture partner, wants to increase its stake in the company. Currently, BAIC owns 5 percent of the German automaker ( purchased in July) with rumors swirling in October that the firm wanted to increase its investment. There were also claims that Geely was attempting to stand in the way of the prospective deal.
While not Daimler’s main squeeze in Asia from a production perspective, Geely actually owns 9.7 percent of the company — giving it quite a bit of leverage. As such, there were murmurings that Geely put the kibosh on any ideas BAIC had on investing further. Geely has rebuffed the accusation. “We are a long-term investor in Daimler. We do not react spontaneously to any volatility and we support Daimler’s management and their strategy,” the firm explained.
Be that as it may, there appears to be a minor power struggle between the two Chinese companies. Both seem interested in strengthening their influence and happen to find themselves in each other’s way.
On Friday, Mercedes-Benz’s parent issued a regulatory filing indicating HSBC held 5.23 percent of Daimler’s voting rights directly as well as through instruments such as equity swaps as of November 15th.
Reuters reports that BAIC previously used HSBC to help it build its initial 5 percent stake — noting that the Chinese automaker held investor conferences in October where corporate executives said “both sides are willing to increase stakes in the other.” Thus far, Daimler has only confirmed that it had received notification from HSBC that the voting stake of 5 percent had been exceeded.
From Reuters:
While the spokesman would not say whether BAIC played a role in the transaction, he added that Daimler welcomed long-term shareholders such as BAIC, who support the carmaker’s strategies.
“Daimler AG appreciates BAIC as long-standing partner and long-term investor,” the spokesman said in a written statement.
“Such shareholders help us to further safeguard and strengthen the capitalization of our company,” the statement continued.
The outlet claimed its information should foreshadow further investments, noting that similar sources indicated BAIC wanted to dump money into the Germany manufacturer to solidify investments into the Beijing Benz Automotive joint venture just two months before that exact situation unfolded.
In March, individuals also told Reuters that Daimler had asked Goldman Sachs to look into how it might increase its own stake in the Hong Kong listed BAIC. The duo have also publicly stated a plan to revamp and expand their joint operations in Asia to include commercial vehicles and battery technology.
[Image: Franz12/Shutterstock]
A staunch consumer advocate tracking industry trends and regulation. Before joining TTAC, Matt spent a decade working for marketing and research firms based in NYC. Clients included several of the world’s largest automakers, global tire brands, and aftermarket part suppliers. Dissatisfied with the corporate world and resentful of having to wear suits everyday, he pivoted to writing about cars. Since then, that man has become an ardent supporter of the right-to-repair movement, been interviewed on the auto industry by national radio broadcasts, driven more rental cars than anyone ever should, participated in amateur rallying events, and received the requisite minimum training as sanctioned by the SCCA. Handy with a wrench, Matt grew up surrounded by Detroit auto workers and managed to get a pizza delivery job before he was legally eligible. He later found himself driving box trucks through Manhattan, guaranteeing future sympathy for actual truckers. He continues to conduct research pertaining to the automotive sector as an independent contractor and has since moved back to his native Michigan, closer to where the cars are born. A contrarian, Matt claims to prefer understeer — stating that front and all-wheel drive vehicles cater best to his driving style.
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So what automakers are *NOT* partially owned by the Chinese today? Any company who has large stakes owned by the Chinese are companies who I want to weed out of any future auto decisions.
Better hope there are no Uighur Muslims working at Daimler AG eh? Horrible country.