China's Geely becomes top shareholder in Mercedes owner Daimler

Posted February 25, 2018

Li changed tactics, and quietly amassed a stake of 9.69 percent worth USA 9 billion at Daimler's current share price. The size of the investment leapfrogs a 6.8-percent stake in the Stuttgart-based group held by Kuwait and Renault-Nissan's 3.1-percent holding.

Geely considers that there is potential in Daimler due to the fact it its developing internet connections that use high speed for autonomous cars during at a time Li says that the satellite beam may one day become more important overall for the auto industry. Since Li's aims are simply for access, Geely has no intention of increasing its stake in Daimler beyond 10% or to take it over in full, the company said.

The Chinese group bought Volvo Cars from Ford in 2010, and has since transformed the fortunes of the Swedish carmaker. The official transaction could be announced by the Hangzhou-based automaker in the coming days, sources told Bloomberg News.

Geely, which owns Sweden's Volvo Cars, continues to expand its portfolio of vehicle brands that includes a 49.9 percent stake in Malaysia's Proton and a 51 percent stake in Britain's Lotus.

Li, 54, is 10th on Forbes magazine's China Rich List and 209th on its global billionaires ranking, with an estimated net worth of US$16.6 billion (RM65 billion).

The stake will not be owned by Geely.

With revenue exceeding RMB 270 billion (about US$43 billion) in 2017, the Zhejiang Geely Holding Group is China's largest privately owned automotive manufacturing company.

Daimler is the world's oldest automaker, with brands including Mercedes-Benz and Smart cars, as well as heavy trucks.

In 2017, auto sales in China rose 3 percent to more than 28 million, leading the world for the ninth consecutive year, according to the China Association of Automobile Manufacturers.

The Stuttgart firm is unusual among its German peers in lacking a single controlling shareholder, whereas Volkswagen is dominated by the Porsche-Piech clan and BMW by the Quandt-Klatten family.

Geely's investment arrives as Daimler begins moving away from a classic German conglomerate model that shareholders complain is too rigid.

Daimler now produces Mercedes-Benz cars and vans, Daimler trucks and busses, and also operates a financial services business.