Friday, September, 29, 2023 01:46:39
BAIC- one of the leading Chinese automakers intends to buy a stake of 5% in Daimler, a German multinational automotive corporation to secure investment in Beijing Benz Automotive, reports source. Earlier this year, BAIC intimated Daimler of its plan to buy 4%-5% of stake in the German company, the original manufacturer of Mercedes Benz. Reportedly, local authorities in Beijing are being requested by BAIC to support 4%-5% stake purchase and on the open market BAIC has started to buy Daimler shares. As per source, BAIC has refused to respond to phone calls and text messages trying to yield a comment. Daimler refused to comment on the deal as well. Based on recent market value of Daimler, which is approximately 57.6 billion euros, it remains uncertain whether BAIC can manage to raise nearly 3 billion euros which a 5% stake in the German auto manufacturer might cost, claims source. German regulatory filings do not acknowledge BAIC as a lead shareholder of Daimler. Stakes of up to 3% can be acquired by buyers, as per German takeover rules, before a regulatory declaration is needed. Daimler has stopped issuing new stocks that has impeded as outsider party from building a stake in the company, compelling potential buyers to secure shares on the market. BAIC showed interest in purchasing a Daimler stake back in 2015 and multiplied its efforts since Li Shufu, chairman of Zhejiang Geely Holding group established a 9.69% stake in Daimler, in 2018. With assistance of Hong Kong shell companies, financing from banks and structured share options, the chairman kept it undisclosed until he was able to become single largest shareholder of Daimler, claims sources with the knowledge of matter. Sources cite that the Germans in alliance with Geely, have recently agreed to build next-generation cars for Smart-branded cities. Daimler also extended reassurance to BAIC that no new industrial associations between Chinese partner and Mercedes would happen without consensus from BAIC. Source credits: