Geely is allegedly planning to acquire between 3 and 5 percent stake in Mercedes’ parent company Daimler
Volvo’s owner Geely has recently purchased American flying car start-up Terrafugia with an aim to launch its first flying vehicle in next two years. Shortly before, it bought Lotus and a good stake in Proton. Its seems like the holding company Zhejiang Geely’s buying moment is not stopping just yet. According to media reports, especially by the China Central Television, the Volvo and Lynk & Co., owner is all set to acquire 3 to 5 percent of Daimler – one of the most influential names in automotive world.
The deal is valued at 4.2 billion USD and if comes into fruition, the Chinese brand will become the second largest shareholder of Mercedes-Benz’s parent company. More crucially, the proposed deal would put it ahead of Renault-Nissan-Mitsubishi global alliance that currently owns 3.1 percent stake in the German firm.
The biggest shareholder in Daimler, Kuwait, has 6.8 percent stake in the company steeped in automobile history while remaining are private investors. If Geely gets its hands on Daimler it has been reported that a joint venture in China would be possible for electric vehicles. Also, the brand will get access to the technologies of Daimler to help develop its own portfolio.
If you recall, Daimler already has a JV established in China with the promising BYD way back in 2012 and it is responsible for the production of an EV company called Denza. Last month Reuters reported that Daimler rejected the offer of Geely to acquire 5 percent stake at a discount. It would have led to the share dilution of existing shareholders but right currently the scenario has changed as the purchase would be in open market instead.
Geely is in a tremendous pressure from Chinese government to introduce electric cars under the New Energy Vehicles scheme with stringent regulations. Automakers present there should make sure 20 percent of all vehicles sold in China be electric by 2025 and every brand should at least have one EV in their range by 2019.