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Daimler in $2 billion China investment with BAIC as Geely swoops

The two will invest more than $1.88 billion in modernising a plant to build premium Mercedes-Benz cars including electric vehicles, said BAIC

Reuters  |  Berlin 

A Daimler sign name is pictured during the company's annual news conference in Stuttgart, Germany

and its Chinese partner plan to invest almost $2 billion in a state-of-the-art factory in China, underlining their relationship as rival makes a surprise swoop on the German carmaker.

The two will invest more than 11.9 billion yuan ($1.88 billion) in modernising a plant to build premium Mercedes-Benz cars including electric vehicles, said in a filing to the Hong Kong Stock Exchange dated Friday and confirmed by on Sunday.

The chairman of Chinese carmaker said late on Friday he had bought an almost 10 per cent stake in Daimler, in a $9 billion bet to access the Mercedes-Benz owner’s technology.

The move poses a challenge to Daimler, which as well as its Chinese partnership with Motor Corporation has an industrial alliance to develop cars and trucks with Renault-Nissan, which owns a 3.1 per cent stake in

Geely's Chairman Li Shufu, who quietly built up the 9.7 per cent stake, is now expected to meet executives in Stuttgart on Monday, a source familiar with the matter said, and hopes to meet top German government officials in Berlin.

His approach contrasts with that of previous Chinese investors in German technology — such as Midea, which bought Kuka or Weichai, which bought a large stake in Kion — who have tended to engage in lengthy consultation with stakeholders.

Berlin said it saw no need to take any action over Geely’s purchase, either in terms of competition rules or of foreign investment rules. “It is a company decision,” a government spokesman said. “Due to the character of the investment as a minority stake, there is no need to act.”

The government declined to comment on a report in German tabloid Bild am Sonnntag that Li would visit the German chancellery for a “secret meeting” with Angela Merkel’s economic adviser on Tuesday.
also declined to comment on any possible meetings with Li. said it wants an alliance with Daimler, which is developing electric and self-driving vehicles and is the only German carmaker not to be controlled by a family, to respond to the challenge from new rivals such as Tesla and Uber.

First Published: Mon, February 26 2018. 00:01 IST