Chinese Automaker Geely Snapping Up a Near 10-percent Stake in Daimler: Report

Steph Willems
by Steph Willems

Is a seemingly unstoppable Chinese automaker slowly amassing a significant ownership stake in Germany’s Daimler AG? That’s what sources tell Bloomberg.

According to the news outlet, sources claim Geely Auto Group, which owns the Volvo, Lotus, and the mysterious Lynk & Co. car brands, is steadily acquiring a $9.2 billion stake in the German giant. That would give the Chinese a near 10-percent stake in the maker of Mercedes-Benz vehicles.

Are we witnessing the birth of a new alliance?

If true, what does Geely hope to gain from this share buy-up? Probably not cash dividends, as Geely reportedly doubled its net income last year amid a 63-percent sales increase of its assorted brands. Operating profits at Volvo Cars rose 28 percent to an all-time record in 2017.

While the Hangzhou, China-based automaker has not made anything public, sources tell Bloomberg that the acquisition of shares occured over a period of several weeks. An announcement could come within days, they said. This jibes with earlier reports describing a stealthy accumulation of Daimler stock by the Chinese company.

Earlier this month, sources told Reuters that Geely had purchased a significant number of shares in Daimler, perhaps totalling close to a 3-percent stake. The sources, who claimed Geely hoped to partner on electric vehicle technology, were unsure as to whether Geely would increase its stake. In November, Reuters reported on sources who claimed Daimler turned down a 5-percent ownership offer from Geely, which hoped to achieve it through a discounted share placement.

It seems, instead, that Geely just went out and bought regular shares. At the time of the report, Daimler CEO Dieter Zetsche said he had no knowledge of any shares purchased by Geely.

“Geely has opted mainly to show their seriousness and to impress on Daimler folks that they are not going away,” one of the sources told Reuters.

China’s electric vehicle mandate has turned the fledgling segment into one of the country’s hottest, leaving its domestic automakers scrambling to outdo each other as a burgeoning middle class snaps up vehicles left and right. A partnership on electric vehicle technology, which sources claim Geely wants, would quickly give the company an edge — without the expenditure of big R&D dollars.

In an idea situation, sources claim, Geely and Daimler would build EVs through a joint venture in Wuhan, capital of China’s Hubei province. This might not interest Daimler, however, as it already has a production partnership with China’s BAIC Motor Corp.

[Image: Siyuwj/ Wikimedia Commons ( CC BY-SA 3.0)]

Steph Willems
Steph Willems

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  • W210Driver W210Driver on Feb 23, 2018

    What’s up with the silly comments? Daimler has had many foreign stakeholders in the past, such as the State of Kuwait and more recently the Emirate of Abu Dhabi. Both of these are the biggest stakeholders of the company.

    • See 1 previous
    • JohnTaurus JohnTaurus on Feb 24, 2018

      This man is now the single largest shareholder. That's why its news and why the comments have skewed the way they have.

  • Jasper2 Jasper2 on Feb 24, 2018

    Stay the hell away from BMW Geely. What is wrong with Mercedes management, don't they know not to dance with the Devil? Stupid asses.

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  • Michael Gallagher I agree to a certain extent but I go back to the car SUV transition. People began to buy SUVs because they were supposedly safer because of their larger size when pitted against a regular car. As more SUVs crowded the road that safety advantage began to dwindle as it became more likely to hit an equally sized SUV. Now there is no safety advantage at all.
  • Probert The new EV9 is even bigger - a true monument of a personal transportation device. Not my thing, but credit where credit is due - impressive. The interior is bigger than my house and much nicer with 2 rows of lounge seats and 3rd for the plebes. 0-60 in 4.5 seconds, around 300miles of range, and an e-mpg of 80 (90 for the 2wd). What a world.
  • Ajla "Like showroom" is a lame description but he seems negotiable on the price and at least from what the two pictures show I've dealt with worse. But, I'm not interested in something with the Devil's configuration.
  • Tassos Jong-iL I really like the C-Class, it reminds me of some trips to Russia to visit Dear Friend VladdyPoo.
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