Geely’s Li buys 10% stake in Daimler
CHINESE carmaker Geely has built up an almost 10 percent stake in Daimler in a $9 billion (R103.72bn) bet by its chairperson that he can access the Mercedes-Benz owner’s technology in the growing battle for the future of automotives.
The purchase by Li Shufu, Geely’s founder and main owner, means China’s largest privately-owned carmaker is now the biggest shareholder in Germany’s Daimler.
Geely said on Saturday that there were no plans “for the time being” to raise the stake further. Instead, it will seek to forge an alliance with Daimler, which is developing electric and self-driving vehicles, to respond to the challenge from new competitors such as Tesla, Google and Uber.
“No current car industry player is likely to win this battle against the invaders from outside without friends. To achieve and assert technological leadership, one has to adapt a new way of thinking in terms of sharing and combining strength. My investment in Daimler reflects this vision,” Li said.
“Daimler is pleased to announce that with Li Shufu it could win another long-term orientated shareholder, which is convinced by Daimler’s innovation strength, strategy and future potential,” the German company said.
Geely officials plan to travel to Stuttgart to meet Daimler executives early next week and also hope to meet top German government officials in Berlin, two sources familiar with the matter said.
The Chinese firm plans to use the meetings to underline that it intends to be a supportive long-term investor, they said.
Daimler had no immediate comment on any meetings. Geely and the German economy ministry declined to comment.
Chinese investors in German technology companies have tended to take a consensual approach, buying incremental stakes in companies such as robotics firms Kuka and Kion, typically after long consultation with management and other stakeholders.
In November, Geely asked Daimler to issue new shares so it could buy a stake, as a way to access Mercedes-Benz tech- nology for electric cars and trucks, including battery technology, to help Geely comply with a Chinese crackdown on pollution.
But the German company turned down the offer saying it did not want to dilute existing shareholders, sources at the time said.
Li changed tactics, and quietly amassed a stake of 9.69 percent worth $9bn at Daimler’s current share price.
The sources said former Morgan Stanley Germany chief executive Dirk Notheis was the architect of amassing the Daimler stake, work- ing with former Morgan Stanley China executive Yi Bao. Notheis declined to comment, while Bao was not reachable.
German state secretary at the economy ministry, Matthias Machnig, said separately that EU trade ministers meeting next week in Sofia would discuss how better to protect strategically important European companies from unwanted investors.
“It is important that Europe keeps a close eye on which key European technologies foreign strategic investors are setting their sights on,” he said. – Reuters