AutoBeta(AutoBeta.net)09/10 Report--

A few days ago, several media reported that BAIC plans to increase its 4.99% stake in Daimler Group by buying shares in the secondary market, when its total shareholding will reach 9.99%, surpassing Geely to become Daimler's largest shareholder. In response to this report, the person in charge of BAIC said in response to the Daily Economic News that "I don't know."

Data show that since 2005, BAIC has carried out strategic cooperation with Daimler Group and co-founded the cooperative brand Beijing Mercedes-Benz. Since the break-up of Daimler and Chrysler, BAIC signed a new strategic partnership with Daimler in 2013, when BAIC's stake in Beijing Mercedes-Benz increased to 51 per cent and Daimler 49 per cent.

However, because the two sides had agreed that each side would hold each other's shares, BAIC formally held 5 per cent of Daimler AG through a 20 billion yuan deal in 2019, making it its third-largest shareholder after Daimler took a stake in BAIC. Because Geely owns 9.69% of Daimler, it is Daimler's largest single shareholder.

However, with the global car market hit by the epidemic in 2020, Daimler's sales and performance have been hit so hard that Daimler has even made up for this year's profits and losses through layoffs, wage cuts and other means. On the other hand, the Chinese market has become the only market for Daimler Group to achieve year-on-year revenue growth in the second quarter. According to BAIC's semi-annual report last year, the revenue of its own brand in the first half of the year was less than 3 billion yuan, with a loss of 1.835 billion yuan, while Beijing Mercedes-Benz's income was as high as 74.9 billion yuan and its gross profit was close to 20 billion yuan. It can be said that Beijing Mercedes-Benz has become a profit cow under the group.

As a result, it emerged a month ago that Daimler planned to restart negotiations with BAIC to increase its stake in Beijing Mercedes-Benz, and Daimler planned to increase its stake in Beijing Mercedes-Benz to 65% from 49%. Hope to reverse the double pressure caused by declining revenue and losses by increasing its stake in Beijing Mercedes-Benz.

Obviously, the change in the stock ratio is a big boon for Daimler and bad for BAIC. In order to dominate Beijing Mercedes-Benz, it has been reported that BAIC plans to increase its stake in Daimler Group by 4.99% through the acquisition of secondary market shares, bringing the total shareholding to 9.99%. In the outside world, the high revenue in the face of Beijing Mercedes-Benz is an important reason why both BAIC and Daimler Group want to increase their stake in Beijing Mercedes-Benz.

It is believed that if the rumors are true, BAIC will take the first step to increase its stake in Daimler on the one hand, or defend it in this way, in order to maintain its dominant position in cooperation with Daimler. At the same time, BAIC can indirectly strengthen its control over Beijing Mercedes-Benz by continuing to hold a stake in Daimler, so that BAIC will not lose the initiative in this game and let the two sides maintain a balanced development.

Data show that Beijing Automobile Co., Ltd. (BAIC), Daimler AG and its wholly-owned subsidiary Daimler Greater China Investment Co., Ltd. hold 51%, 38.66% and 10.34% shares of Beijing Mercedes-Benz Automobile Co., Ltd., respectively. That is, the share ratio of BAIC to Daimler is 51:49.

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