(Yicai Global) July 24 -- State-owned Chinese carmaker Beijing Automotive Industry Holding, or BAIC Group, has acquired a 5 percent stake in Mercedes-Benz owner Daimler in a bid to fortify ties between the two firms.
BAIC will pay an undisclosed sum for 2.48 percent of Daimler, the rights to buy a further 2.52 percent, and voting rights, it said in a statement yesterday. The deal will make two of Daimler's top three shareholders Chinese, after Geely Holdings Group bought a 9.7 percent stake in February 2018 to become its biggest stakeholder.
The investment shows BAIC's intent to further ties with Stuttgart-based Daimler, something it has been looking to do more and more since Geely's share purchase, The Paper cited an industry insider as saying.
BAIC and Daimler teamed up in 2005 when they set up the Beijing Benz Automotive joint venture, and the pair also founded a truck-making unit, Beiqi Foton Motor, together in 2012. Daimler owns 9.55 percent stake in BAIC's Hong Kong-listed Beijing Motor and a 3 percent stake in its subsidiary Beijing Electric Vehicle, both purchased in 2013.
The deal comes as Daimler is also enhancing ties with its new biggest shareholder, having announced in October that it and Geely will set up a premium ride-hailing joint venture in China with a 50-50 split. They will also found a company to promote a transition to intelligent technologies and plan to create a leading high-end smart vehicle brand, the pair announced in March.
Both plans -- and any similar ones with Chinese partners -- will also need approval from BAIC, Daimler Chairman Dieter Zetsche said at the China Development Forum in March.
Editor: James Boynton