Chinese billionaire Li Shufu buys biggest single stake in Daimler

25 February, 2018, 00:34 | Author: Tracy Craig
  • An employee holds a Mercedes Benz badge on the assembly line at the automaker's factory in Bremen Germany

With revenue exceeding RMB 270 billion (about Dollars 43 billion) in 2017, the Zhejiang Geely Holding Group is China's largest privately owned automotive manufacturing company and one of the world's leading providers of electro-mobility.

Li, who chairs auto giant Geely Automobile Holdings, bought a 9.69% stake in the carmaker, worth around 7.2 billion euros (RM34.8 billion), according to the filing.

Geely, which already owns Volvo Cars and Lotus, has built up a 9.69 per cent stake in Daimler, the German carmaker said in a filing late on Friday.

Kuwait's sovereign wealth fund, which has been an investor in Daimler for decades, was the largest stakeholder in the automaker as of the end of December with a 6.8 per cent holding.

Geely's investment arrives as Daimler begins moving away from a classic German conglomerate model that shareholders complain is too rigid. It issued a statement saying it was pleased with the investment.

"Daimler is an outstanding company with a first-class management".

Geely said on Saturday (Feb 24) there were no plans "for the time being" to raise the stake further.

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Geely Holdings chairman Li Shufu speaks at a business forum in Shanghai earlier this month.

Daimler and other automakers are scrambling to develop electric vehicles to comply with increasingly stringent emissions standards that will take effect in China and Europe in the coming years.

Geely's expansion comes only weeks after a $3.9bn move to become the biggest shareholder in truckmaker Volvo AB.

Geely Group owns one of China's largest car-sharing providers, Cao Cao (100 percent), operating a fleet of around 16.000 electric vehicles worldwide.

"Chinese companies understand that leading European firms lean heavily on the People's Republic for sales and profits", said Michael Dunne, president of Dunne Automotive, a Hong Kong-based investment advisory firm focusing on automotive markets in Asia.

Global motor manufacturers are seeking to strike deals in China, the world's largest auto market, but centred on electric cars in order to get an increased foothold in a segment set to grow rapidly in the coming years.



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