Daimler rejects Chinese offer to buy 5% for $4.5 bn by Geely
30 Nov 2017
German carmaker Daimler AG has rejected an offer from China's largest independent car maker Geely to buy a stake of up to 5 per cent via a discounted share placement, Reuters yesterday reported, citing sources with knowledge of the talks.
Although Daimler, the maker of Mercedes-Benz cars declined the offer, it told Geely it was welcome to buy shares in the open market, the report said.
The 5-per cent stake would be worth $4.5 billion at current market prices.
If Geely buys the 5 per cent stake from the open market, it would become Daimler's third-largest shareholder behind the Kuwait Investment Authority and BlackRock, who hold 6.8 per cent and 6 per cent respectively, according to Reuters data.
Daimler has joint ventures with Chinese carmaker BAIC Motor Corp and a tie-up with BYD, a Chinese automaker backed by Warren Buffett.
Hangzhou, Zhejiang-based Geely manufactures automobiles, taxis, motorcycles, delivery vans, engines, and transmissions.
It had acquired Sweedish carmaker Volvo from Ford Motors in 2010 for $1.8 billion. (See: China's Geely completes $1.8-bn acquisition of Ford's Volvo Cars)
People with knowledge of Geely's thinking said the company was keen to access Daimler's electric car battery technology and wanted to establish an electric car joint venture in Wuhan, the report said.
Carmakers in China have embarked on a flurry of deal making in order to boost production of electric and plug-in hybrid vehicles ahead of tough new quotas to be imposed by Beijing, which wants to reduce urban smog and lower the country's reliance on oil, the report added.
Last year, Chinese firms spent more than $40 billion acquiring European companies.
Frankfurt and Stuttgart stock exchanges-listed Daimler is one of the biggest producers of premium cars and the world's biggest manufacturer of commercial vehicles.
Daimler sells its vehicles and services in nearly all the countries of the world and has production facilities in Europe, North and South America, Asia, and Africa.
Its current brand portfolio includes Mercedes-Benz, Mercedes-AMG, Mercedes-Maybach and Mercedes me, the brands smart, EQ, Freightliner, Western Star, BharatBenz, FUSO, Setra and Thomas Built Buses.
The company sold around 3 million vehicles, employed more than 282,000 people and has annual revenue of €153.3 billion.
