Geely offered to purchase 5% stake in Daimler at a pricing of around $4.5 billion
Daimler has refused Chinese automobile group and Volvo owner Geely’s offer to purchase 5% stake that could cost around $4.5 billion at current market price. The German luxury auto giant already has joint ventures with Chinese automakers like BAIC Motor Corp and BYD. Upon refusing the stake purchase offer, Daimler has said that Geely can buy shares in open market.
However, despite refusing the offer, Daimler has also said it welcomes the new investors with long term interest in the company. Had Daimled accepted Geely’s offer, the Chinese company would have become the German brand’s third-largest stakeholder after Kuwait Investment Authority and BlackRock. Interestingly, Chinese companies are coming up as big investors in the world auto market and Geely is one of them.
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With Volvo already under its arm, Geely made a bid for the FCA owned iconic American SUV manufacturer Jeep as well. However, FCA decided not to sell the Jeep. Speaking about Geely, the Chinese automobile giant manufactures engines and transmissions alongside cars and motorcycles. The company purchased famous sportscar brand Lotus and flying car manufacturing startup Terrafugia as well. Overall the brand is eying to expand its business across the world and its offer to buy stake in Daimler was a part of that expansion strategy.
Interestingly, in Indian market too we are seeing the Chinese auto majors are showing keen interest. SAIC has already purchased the Halol plant in Gujarat from General Motors. The plant will roll out the SAIC owned MG Motors cars in the country. With this step, SAIC is going to be the first Chinese automaker in the highly competitive Indian market.
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As India is one of the biggest auto markets in the world, Chinese companies don’t want to neglect the country market. Not only in the car segment, in the two-wheeler category of domestic market too, we have seen several Chinese brands shown interest.
Source: Reuters