Geely to buy up to 10% stake in Daimler for $9 bn

Chinese manufacturer Zhejiang Geely Holding Group has acquired a stake worth about €7.3 billion ($9 billion) in Daimler  to become the largest investor in the German automaker.

Daimler confirmed the holding in a regulatory filing, shortly after Bloomberg News first reported that Geely has been building up a stake of just under 10 per cent through purchases in the stock market in recent weeks. The German company said it welcomes another major investor.

Buying a stake in the parent of Mercedes-Benz furthers Hangzhou-based Geely’s foray into the European premium automotive market and ends months of speculation. The company, controlled by billionaire Li Shufu, already owns Volvo Cars, whose refreshed line-up of vehicles have made it a popular alternative to the German luxury stalwarts. “A Geely stake in Daimler would underscore their push for cooperation that’ll help them get more expertise, like electric cars,” said Frank Biller, a Stuttgart-based analyst with Landesbank Baden-Wuerttemberg. “At the same time, this opens another path into China for Daimler.” Daimler has been on an upward trajectory, reclaiming the No 1 crown in luxury cars from BMW, and broadening its offerings to include more SUVs and overhaul its lineup with sportier designs.

The Stuttgart-based carmaker is looking forward to another long-term investor recognizing the company’s innovative strengths, spokesman Joerg Howe said by phone.

“Li Shufu is a Chinese entrepreneur Daimler knows well and regards highly in terms of his competency and focus on future developments,” Howe said. “Daimler already has a strong footing in China. We have a very strong partner with our existing cooperation with BAIC Motor.”

Representatives at Geely couldn’t immediately be reached outside business hours in Asia.