BAIC & Benz: Bloggers Scoop Dow Jones
How do you beat the Dow? Occasionally, by reading TTAC. Yesterday, we wrote about Beijing rumors that Daimler and China’s BAIC are planning a big tie-up.
While we at TTAC are busy looking for the appropriate tie-up pictures, in case the rumor should prove true, the Dow Jones Newswire reports today:
“Daimler AG (DAI.XE) will on Friday sign an agreement with Beijing Automotive Group Co., known as BAIC Group, over a share swap deal, the Chinese internet portal Tencent News reported Wednesday.
Under the agreement, Daimler will take a stake of 10%-20% or even higher in BAIC Motor Co., a unit of China’s fifth-largest car maker BAIC Group, and BAIC Motor will raise its stake in Beijing Benz Automotive Co., its joint venture with Daimler, to 51% from 50%, the report said.
It is unclear how big a stake BAIC will take in the German luxury auto company, said the report.”
We are (somewhat) glad to see the Dow Jones Newswire devolve into quoting QQ as a source, because that’s what is lurhking behind “Tencent News”. We asked Tycho de Feyter, Editor in Chief of Beijing’s more reputable Carnewschina for his analysis, and he says after reading QQ and auto.163.com:
“Chinese media are reporting, quoting “informed sources”, that the Beijing Auto Industry Corporation ( BAIC) and Daimler Benz will sign a ‘strategic cooperation agreement’ on February 1 in Germany. Details are scarce, but the sources say BAIC and Daimler will take an interest in each other, ranging somewhere from 10 to 20%.
In a directly related agreement: Daimler will sell 1% of its 50% share in the Beijing-Benz joint venture to BAIC. This clears the way for an IPO from BAIC on the Chinese stock market. Chinese regulations do not allow BAIC to count the joint venture as an asset if its stake is below 51%. The new equity-ratio will be 51%-49%. How much BAIC pays for the 1% is yet unclear.
In another related agreement: Beijing Auto, a subsidiary of BAIC, will be allowed the use the platform of the Mercedes-Benz E-class for a a furure Beijing Auto-branded luxury vehicle, which will very likely be based on the C90L Concept. We heard the first rumors about this part of the story back in June last year.”
Tycho’s Qingdao competition, Ash Sutcliffe at Carnewschina, thinks what is in the works could be that “three years after the Chrysler-Daimler split, Daimler are looking to their Chinese partner Beijing Auto to create a Renault-Nissan style alliance.” However, Ash, who know his sources, warns that the “reports are more rumor than actual fact at this stage.” This apart from the fact that Daimler already is part of a Renault-Nissan-Daimler alliance.
We reiterate the warning: Neither QQ nor 163 are known as the epitome of reliability, their youthful and underpaid, yet very creative writers are easy to flummox. Even more respectable Chinese publications can cook up an impressive spread of daily nonsense. We’ll see.
Gotta go and look for the a propos tie-up picture for the Friday story. How about this tasteful one? The white socks must be a German guy. No? Ok, I’ll look for more.
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