Daimler has announced that it is to take a 12% stake in its Chinese partner Beijing Automotive Group (BAIC).
Daimler will pay EUR640 for the stake ahead of BAIC’s planned IPO and the company believes it will help it to secure a strong strategic position in the world’s largest car market.
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The premium car segments have performed well in China’s growing market in recenty years. However, Mercedes-Benz has not grown as quickly as rivals BMW and Audi and is seeking to get greater control over its China sales.
“We will be the first non-Chinese manufacturer to take a stake in a Chinese OEM,” finance chief Bodo Uebber said.
The agreement means that Daimler will receive two seats on the board of directors of BAIC Motor. The two companies also agreed that BAIC will increase its stake in the production joint venture Beijing Benz Automotive Company (BBAC) by 1% to 51% and will be able to consolidate this joint venture within BAIC ahead of its IPO (expected later this year on the Hong Kong stockmarket). At the same time, Daimler will increase its stake in the integrated sales joint venture Beijing Mercedes-Benz Sales Service Co. by 1% to 51%.
Daimler’s shareholding in BAIC is subject to the approval by the relevant authorities. A closing of the transaction is expected by the end of this year or early next year.
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