Published: Sun, February 25, 2018
Science | By Dan Gutierrez

Geely chairman builds US 9 bln stake in Germany's Daimler

Geely chairman builds US 9 bln stake in Germany's Daimler

The stake purchase follows an initial approach last November, when Mr Li sought to buy a Daimler stake as a way to access Mercedes-Benz technology for electric cars and trucks, including battery technology, to help Geely comply with a Chinese crackdown on pollution.

Daimler confirmed the holding in a regulatory filing, shortly after Bloomberg News first reported that Geely has been building up a position of just under 10 per cent through purchases in the stock market in recent weeks.

Geely is based in the eastern Chinese province of Zhejiang.

Representatives at Geely couldn't immediately be reached outside business hours in Asia.

Daimler itself is planning the biggest corporate overhaul in a decade, firming up plans toward the end of 2017 to break up its rigid conglomerate structure, instead creating a holding company with three separate units: Mercedes-Benz Cars & Vans, Daimler Trucks & Buses and the financial-services division. It will be an honor to support this unique team under the leadership of Dieter Zetsche in the future.

Late past year, Geely acquired a stake in the Volvo Trucks group, a separate entity, becoming its largest investor in a deal that has not yet closed.

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Geely Holding has increased its expansion drive.

The Chinese automaker is the owner of Sweden's Volvo Cars and Lotus Cars of the United Kingdom, and in December reached a roughly $3.3 billion agreement making it the largest shareholder in Swedish truck maker AB Volvo. "Daimler already has a strong footing in China".

Geely itself is no stranger to the European auto business, having bought Sweden's Volvo Cars Corp in 2010.

China is now the largest market for auto sales, and virtually all Western automakers have operations there, typically with a Chinese partner.

Worldwide motor manufacturers are seeking to strike deals in China, the world's largest vehicle market, but centred on electric cars in order to get an increased foothold in a segment set to grow rapidly in the coming years.

The rumour mill has been working overtime since Daimler refused to sell a chunk of its stock at a discount to Geely Chairman Li Shufu a year ago, suggesting he might instead buy the stock on the market if he was so keen.

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