According to a report citing three sources familiar with the matter, BAIC Group wants to buy the stake to ensure its investment in Beijing Benz Automotive is protected. Reuters reported BAIC let Daimler know earlier this year it was interested in buying anywhere from a 4 percent to 5 percent stake in the car maker that owns Mercedes-Benz. The company has also asked for the support of local authorities in the deal. BAIC has since begun buying shares on the open market, the sources told Reuters. A person familiar with the matter said the share price of Daimler is being “underpinned” by an investor who seems to be building a position in the company.
Reuters noted that it remains to be seen if BAIC has the 3 billion euros necessary to acquire the 5 percent stake. At the end of trading Friday (May 10) Daimler was valued at 57.6 billion euros. BAIC has been interested in acquiring a stake in Daimler for years. It has increased its push after Zhejiang Geely Holding chairman Li Shufu acquired a 9.69 percent stake in Daimler in the early part of last year. The company is a rival of BAIC Group. Reuters noted Li kept the position secret until he was able to become the largest single shareholder of the car company.
In March Geely and Daimler agreed to jointly develop smart city cars. Daimler and Geely have worked together more closely over the prior year: Daimler Mobility Services and Geely Group Company announced the creation of a joint venture for high-end ride-hailing in China in October. The firms said that the service would offer services for ride-hailing in multiple cities in China through premium vehicles. And Mercedes-Benz S-Class, V-Class and E-Class, along with Maybach vehicles, would make up the first fleet. They also could be supplemented by Geely Group electric vehicles.