2019 Mercedes-Benz CLSEnlarge Photo
State-run China Central Television (via The Standard) has reported that Geely, which also owns Volvo and Lynk & Co., plus its own eponymous car brand, is set to acquire between 3 and 5 percent of Mercedes-Benz parent company Daimler in a deal valued at about $4.7 billion.
If completed, the deal would make Geely the second biggest shareholder of Daimler and position it ahead of the Renault Nissan Mitsubishi Alliance, which owns a 3.1 percent stake. The single biggest shareholder is the country of Kuwait with a 6.8 percent stake. The rest of the German auto giant is owned by institutional and private investors.
It’s alleged that Geely is looking to access some of Daimler’s technology as well as to establish an electric car joint venture in China. Daimler has already established an electric car joint venture in China with BYD. Established in 2012, the joint venture is responsible for the electric car brand Denza.
Reuters in November reported that Daimler had rejected an offer by Geely to buy a 5 percent stake at a discount, a move which would have diluted the shares of existing shareholders, but told Geely it could buy shares in the open market.
Geely, like most automakers operating in China, are under pressure to launch electrified vehicles, known locally as New Energy Vehicles, to meet tough new standards issued by the government. These include a target for electrified cars to make up at least a fifth of local sales by 2025, with a staggered system of quotas beginning as early as 2018. In addition, all major automakers must offer at least one electric car for sale by 2019. The country is also considering a total ban on cars powered solely by gasoline or diesel engines.