AutoBeta(AutoBeta.net)05/12 Report--

BAIC has sought local government support to acquire a 40.5 per cent stake in Daimler, which could cost more than 20 billion yuan, Reuters reported.

BAIC and Daimler established cooperation as early as 2005, forming a joint venture to produce Beijing Mercedes-Benz-branded cars in China, with BAIC accounting for 51% of the joint venture company and Daimler holding the remaining 49%.

BAIC has begun to buy Daimler shares on the open market, and the acquisition may eventually cost more than 20 billion, and BAIC has informed Daimler of the acquisition, the report said, citing people familiar with the matter.

But so far, neither Daimler nor BAIC has responded.

According to analysts, BAIC's move is to consolidate its position in the joint venture and further bind and deepen its cooperation with Daimler.

In view of the lifting of foreign equity ratio restrictions on passenger cars and the restriction of no more than two joint ventures in 2022, foreign brands are seeking to increase their shareholding in the joint venture and regain control. However, for independent brands, the decline in shareholding means the loss of control and the corresponding profits will be greatly reduced. As we all know, Beijing Mercedes-Benz has always been the profit cow of BAIC.

In December 2018, Bloomberg reported that Daimler proposed plans to increase its stake in its joint venture with BAIC from 49% to no less than 65%.

Although BAIC and Daimler jointly issued a statement saying they are satisfied with the partnership, Daimler certainly wants to take more shares with the opening of the market.

At present, the largest shareholder of Daimler shares is Zhejiang Geely holding Group Co., Ltd., with a shareholding ratio of about 9.69%. After taking the position of major shareholder, Geely successfully won the cooperation project of domestic Smart.

Interestingly, in January, Bloomberg suddenly revealed that Geely wanted to reduce its 5.4% stake in Daimler.

But soon, Geely Holdings issued an official statement: there are no plans to reduce its stake in Daimler and its stake in Daimler will remain unchanged.

First, Daimler proposed to increase its stake in the Beijing Mercedes-Benz joint venture, and then it was exposed that Geely had reduced its stake in Daimler, and then there was news that BAIC had acquired Daimler shares, all of which involved about 5% of the shares. Is this series of operations too coincidental?

In any case, if BAIC does plan to buy a stake in Daimler, it must have something to do with the battle for control of Beijing Mercedes-Benz. rub one's eyes and wait.

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