Daim­ler turns down Geely of­fer to take up to 5% stake

The Star Malaysia - StarBiz - - Foreign News -

HONG KONG: Daim­ler AG has re­buffed an of­fer from China’s Geely to take a stake of up to 5% via a dis­counted share place­ment due to long-held re­luc­tance to see ex­ist­ing share­hold­ings di­luted, peo­ple with knowl­edge of the dis­cus­sions said.

A stake of that size would be worth as much as US$4.5bil at mar­ket prices.

The two au­tomak­ers met in Bei­jing in re­cent weeks at Geely’s be­hest.

There, the Chi­nese firm, for­mally known as Zhe­jiang Geely Hold­ing Group, of­fered to take a stake of be­tween 3% and 5% if Daim­ler would is­sue new shares at a dis­count, the peo­ple said.

The Ger­man group de­clined the of­fer but told Geely, which also owns Swedish car maker Volvo, it was wel­come to buy shares in the open mar­ket, they said.

It was not im­me­di­ately clear if Geely is in­ter­ested in that op­tion.

Peo­ple with knowl­edge of Geely’s think­ing said the com­pany’s plans for a tie-up with Daim­ler in­cluded es­tab­lish­ing a joint ven­ture to pro­duce elec­tric cars and that it was hope­ful it could still se­cure a deal in some form over the com­ing weeks.

A spokesman for Geely de­clined to com­ment. A spokesman for Daim­ler said the com­pany was “very happy with our share­holder struc­ture at present” but added that it would wel­come new in­vestors with a long-term in­ter­est in the com­pany.

A stake of 5% would es­tab­lish the Chi­nese group as Daim­ler’s third-largest share­holder be­hind the Kuwait In­vest­ment Au­thor­ity and Black­Rock, who hold 6.8% and 6% re­spec­tively, ac­cord­ing to Reuters data.

Daim­ler has a long-es­tab­lished joint ven­ture with Chi­nese car­maker BAIC Mo­tor Corp, which its spokesman de­scribed as “our most im­por­tant part­ner in China.”

This month it an­nounced plans to in­vest at least five bil­lion yuan (US$757mil) in elec­tric bat­tery and ve­hi­cle pro­duc­tion with BAIC in China. It also has an­other tie-up with BYD, a Chi­nese au­tomaker backed by War­ren Buf­fett.

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