China's Geely buys a $9 billion stake in Daimler, reports Bloomberg

Feb 25, 2018, 01:59
China's Geely buys a $9 billion stake in Daimler, reports Bloomberg

Mr. Li, 54, is chairman of Zhejiang Geely Holding Group, a private company that owns a Chinese carmaker, Geely Automobile, as well as Volvo Cars, the Swedish auto brand.

Geely on Saturday announced that it did not have any plans for now to increase its stake any further. Geely is the largest privately owned automaker in China and has a tough road ahead of it as Chinese authorities look to tighten emissions regulations to heavily favor electric vehicles.

The vast auto market in China and the rising strength of Chinese automakers have contributed to a series of worldwide mergers and acquisitions.

Chinese automaker Zhejiang Geely will soon announce a $9.2 billion stake in German luxury conglomerate Daimler AG. "At the same time, this opens another path into China for Daimler".

However, in a speech to the CAR Institute automotive conference in Bochum, Germany earlier this month, Li skirted around the speculation, saying that Europe has "a very important role for the development of automotive brands under our leadership".

"Geely will help Daimler take the lead in electric vehicles and online technological services", said Li Shufu, chairman of Geely.

"Daimler knows and appreciates Li Shufu as an especially knowledgeable Chinese entrepreneur with clear vision for the future, with whom one can constructively discuss the change in the industry", it said. Daimler is working on both electric cars and battery-powered trucks. HNA Group Co, the aviation-to-hotel conglomerate, has a stake of about 8.8 per cent in Deutsche Bank AG, and industrial-robot maker Kuka was purchased by Midea, the world's largest appliance maker.

"I will fully abide by the company charter and governance structure of Daimler and respect its values and culture", Li said in the statement.

Daimler told Bloomberg that it welcomes another major investor and views the move as a vote of confidence.

And it seems that't exactly what he's done, and now owns 9.69 per cent of Daimler - which will have cost him around £6.5 billion - making Li the single largest shareholder, with 50 per cent more stock than the next biggest shareholder Kuwait Investment.

"The competitors which technologically challenge the global auto industry in the 21st century are not part of the automotive industry today", Li said.

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