Geely Group, a company owned by Li Shufu and managed by Zheijang Geely Holding Group, has acquired a 9.7 percent stake in Daimler AG, through open market purchases of shares. The move appears to be part of a long-term strategy by Li to position Geely for growth in e-mobility and possible access to Daimler technologies.
Previous to Li Shufu’s acquisition, the Kuwait Investment Authority was the largest shareholder with a 6.8% stake. The sovereign wealth fund has been a major shareholder in Daimler for decades.
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Earlier this month just-auto reported that Geely had been building up a stake in Daimler on the open market after the German company turned down a request towards the end of last year to issue new shares in a discounted placement.
Geely is said to be trying to push through a deal with Daimler to access its in-house electric vehicle battery technology. Mercedes-Benz produces its own battery systems for electric and plug-in hybrid vehicles at a facility in Germany.
Geely has set ambitious short-term targets for sales of new-energy vehicles (NEVs) in China, way in excess of what the Chinese government is demanding.
Other analysts have suggested Li Shufu is more interested in forging a truck sector alliance with Mercedes-Benz to help meet China’s growing logistic needs.
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By GlobalDataMercedes-Benz already has a long-standing alliance in China with BAIC group and recently formed a new electric vehicle partnership with local company BYD. It fears an additional Chinese alliance would create complications with its existing partners.
Geely already controls Swedish carmaker Volvo and the UK’s London Taxi manufacturer LECV, and has significant stakes in Malaysia’s Proton and Lotus Cars. It is also understood to have a minority stake in Volvo Trucks.
Daimler responded gallantly to this latest news, with a spokesperson quoted by Reuters as saying “we are pleased to have won a new long-term investor who is convinced of the innovation power, strategy and potential of Daimler”.
“Daimler is an outstanding company with a first-class management. It will be an honor to support this unique team under the leadership of Dieter Zetsche in the future,” said Li Shufu, chairman and owner of Zheijang Geely Holding Group. “I am particularly pleased to accompany Daimler on its way to becoming the world’s leading electro-mobility provider.”
The share purchase makes Li Shufu currently the single largest shareholder of Daimler AG and points to a long-term commitment. Geely said in a statement that ‘for the time being’ it does not intend to acquire additional shares. Li Shufu said he will fully abide by the company charter and governance structure of Daimler AG and respect its values and culture.
With revenue exceeding RMB 270 billion (USD 42.7 billion) in 2017, the Zheijang Geely Holding Group claims it is China’s largest privately owned automotive manufacturing company and one of the world’s leading providers of electro-mobility.
