Billion-Euro deal will secure Geely a seat at the board.
Ever-growing Chinese automotive conglomerate Geely continues the expansion of its reach, and appear to be less than content than the treasure chest of car brands under its umbrella. While the marque has acquired Volvo, the London Taxi Company, and Lotus outright, and maintain PROTON as a strategic partner, it seems that they want to put their fingers into one very lucrative, hallowed pie: Mercedes-Benz.
The Chinese concern is looking to acquire a significant stake in Daimler, Merc’s parent company, with something like 3%-5% being eyed with a pricetag purported to be around the 4-billion Euro mark (or about $6.2-billion in today’s rates). This was reported by The Global Times, citing the China Central Television (CCTV) network, which is a state-owned entity.
Last month, it was reported by Reuters that Geely had made a bid to acquire 5% of Daimler at a reduced rate, which Daimler rejected. Daimler told Geely that they were more than happy to permit them to buy their stake on the open market (at market rates, naturally), advice that the latter appears to have heeded.
Should the purchase go through, it will place Geely as one of the biggest single shareholders in Daimler, with only the state of Kuwait owning a larger piece of the pie (at 6.8%). The other big shareholder on the board is the Renault-Nissan-Mitsubishi Alliance, which own a 3.1% concern in Daimler, too.
Geely’s expansion appears to be with little hindrance. A buy-in into Daimler would be the second big move by the Chinese conglomerate in the last few months, having purchased a 49.9% stake in Malaysian carmaker PROTON and a 51% stake in British sports car specialists Lotus in May, having bought both from Malaysian industrial stalwart DRB-Hicom. The question on our mind is whether this move will in any way influence the future of Volvo, given that Mercedes is its direct competitor. Time will tell.
Stay tuned to CarShowroom for more updates as they come.