China’s BAIC in talks over Daimler stake
The Chinese group BAIC Motor is in talks with Daimler about taking a stake in the German carmaker, Daimler’s chief executive said on Thursday.
Dieter Zetsche, who has run the German group since 2006, said in an interview with Reuters that any stake would have to be structured in such a way as to avoid diluting the interests of existing Daimler shareholders.
But he added that while the duo were looking at “possible mechanisms” to do this, whether or not “concrete steps” followed the negotiations depended on BAIC.
A deal would represent the latest foray abroad by China’s car industry, where there has been a growing trend for the biggest carmakers to acquire interests in recognised western brands.
The country’s car manufacturers have so far failed to make a dent in their own right in the global automotive stage, even though it is more than three decades since Volkswagen set up one of the country’s first big joint ventures.
The talks between Daimler and BAIC come 18 months after Dongfeng acquired a 14 per cent stake in PSA Peugeot Citroën of France for €800m. Geely, China’s first non-state owned carmaker, has since 2010 acquired both Sweden’s Volvo and the London Taxi Company, maker of the British capital’s black cabs.
Meanwhile, General Motors sold a $500m stake in its 2010 initial public offering to Shanghai Auto, its Chinese partner.
Daimler already has close ties with the Chinese car industry. It has a 10 per cent stake in BAIC, the listed arm of Beijing Automotive Group, as well as a joint venture with BAIC to sell Mercedes-Benz cars in the country.
Mr Zetsche reiterated on Thursday that Daimler had “said from the start” that its stake in BAIC, which it took in 2013, could one day lead to a cross-shareholding.
Xu Heyi, BAIC chairman, said at the time that the two companies “will never be able to live apart from each other”, as Daimler opened its first fully fledged engine factory outside Germany.
Daimler’s largest shareholders are the Kuwait Investment Authority, which has a 6.8 per cent stake, and Renault-Nissan, with which the German company has a cross-shareholding agreement.
In the past the German car group has issued new shares to allow big investors — such as Abu Dhabi’s Aabar Investments — to buy into the company. Shares in Daimler, which are up 16 per cent so far this year, closed down 0.4 per cent at €73.90.