AutoBeta(AutoBeta.net)11/26 Report--

On November 26, according to media reports, BAIC intends to continue to increase its stake in Daimler, and if the increase is confirmed, BAIC may become the largest shareholder of Daimler.

On July 23, BAIC announced that in order to strengthen the long-term strategic cooperation between the two sides, it would invest in Daimler AG, which currently owns 5% of Daimler AG, including 2.48% direct shareholding and the right to obtain additional voting rights equivalent to 2.52% of the shares.

The move led to a complex triangular relationship between Daimler, BAIC and Geely. After the deal, BAIC became Daimler's third-largest shareholder, after Geely, which owns 9.7%, and Kuwait's sovereign fund, which owns 6.8%.

On Nov. 22, HSBC directly held 5.23% of Daimler's voting rights as of Nov. 15, according to Daimler's regulatory filings. It was through HSBC that BAIC acquired a 5% stake in Daimler in July. As a result, BAIC is likely to once again acquire a more than 5 per cent stake in Daimler through HSBC, surpassing Geely to become Daimler's largest shareholder.

In fact, BAIC and Daimler have been working together since 2003. In 2003, Daimler began to cooperate with BAIC on production, R & D and sales; in 2005, BAIC and Daimler jointly established Beijing Mercedes-Benz, and with the deepening of the cooperation, BAIC Foton and Daimler formed another joint venture in 2012 to produce medium and large trucks.

In 2013, Daimler acquired Beijing Automotive, a Hong Kong-listed company of BAIC, and currently owns 9.55% of the total.

In 2016, BAIC acquired a 35% stake in Fujian Mercedes-Benz, followed by Daimler's acquisition of BAIC New Energy.

On August 8, 2018, S*ST Vanguard, the object of BAIC New Energy's backdoor listing, announced that the company's Chinese name would be changed to "BAIC Blue Valley New Energy Technology Co., Ltd.". Currently, Daimler has a 3.01% stake in BAIC Langu.

Xu Heyi, chairman of BAIC, has said that negotiations for a stake in Daimler started after the agreement was signed in 2013, but because of the rigor and complexity of German regulations, the approval process has been going through for the past two years and a final result is expected by the end of 2015.

As for why cross-shareholdings took six years to achieve, Mr Xu said BAIC was state-owned and 100 per cent state-owned, and lacked experience in operating such things, so it was extremely cautious. Daimler shares in the first we are easier to operate, we slow down a little bit, it does not matter, anxious can not eat hot tofu.

However, BAIC did not disclose relevant information about BAIC increasing its stake in Daimler.

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